uperfiber Insulation, Inc., has told you, the plant engineer, that he can reduce the heat loss by 60% 00 worth of Superfiber now. If the cost of heat loss rises by $150 per year (uniform gradient) after plans to keep the present building for 11 more years, what is the present worth of the savings? W ing the insulation now given that the interest rate of 10.71% year?"
uperfiber Insulation, Inc., has told you, the plant engineer, that he can reduce the heat loss by 60% 00 worth of Superfiber now. If the cost of heat loss rises by $150 per year (uniform gradient) after plans to keep the present building for 11 more years, what is the present worth of the savings? W ing the insulation now given that the interest rate of 10.71% year?"
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Pls help with below homework.
Transcribed Image Text:"The heat loss through the exterior walls of a certain poultry processing plant is estimated to cost the owner $2000 next year. A
salesperson from Superfiber Insulation, Inc., has told you, the plant engineer, that he can reduce the heat loss by 60% with the
installation of $15000 worth of Superfiber now. If the cost of heat loss rises by $150 per year (uniform gradient) after the next
year and the owner plans to keep the present building for 11 more years, what is the present worth of the savings? Would you
recommend installing the insulation now given that the interest rate of 10.71% year?"
A) 307680.33
В
9811.31
131478.18
D) 241216.25
E) 127808.22
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