f you insulate your office for $29,000, you will save $2,900 a year in heating expenses. These savings will last forever.   a. What is the NPV of the investment when the cost of capital is 5%? 10%? b. What is the IRR of the investment? (Enter your answer as a whole percent.) c. What is the payback period on this investment?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...
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f you insulate your office for $29,000, you will save $2,900 a year in heating expenses. These savings will last forever.

 

a. What is the NPV of the investment when the cost of capital is 5%? 10%?

b. What is the IRR of the investment? (Enter your answer as a whole percent.)

c. What is the payback period on this investment?

 

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