A 2,000 square foot house in New Jersey costs $1,725 each winter to heat with its existing oil-burning furnace. For an investment of $5,000, a natural gas furnace can be installed, and the winter heating bill is estimated to be $1,000. If the homeowner’s MARR is 6% per year, what is the discounted payback period of this proposed investment? (a) 7 years (b) 8 years (c) 9 years(d) 10 years.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A 2,000 square foot house in New Jersey costs $1,725 each winter to heat with its existing oil-burning furnace. For an investment of $5,000, a natural gas furnace can be installed, and the winter heating bill is estimated to be $1,000. If the homeowner’s MARR is 6% per year, what is the discounted payback period of this proposed investment? (a) 7 years (b) 8 years (c) 9 years
(d) 10 years. 

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