5. Ive spent $10,000 to install high efficiency windows in my home. They are expected...

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Finance

5. Ive spent $10,000 to install high efficiency windows in my home. They are expected to last 20 years. I expect my annual heating bill to decrease by $1,000.

a. What is the net present value of my investment? Use a discount rate that is appropriate for YOU as an individual?

b. If city hall had made this investment, what is the payback time? Use a discount rate appropriate for a public project.

c. Calculate the Internal Rate of Return for this project. Would a profit maximizing company be willing to invest in this project at their corporate offices?

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