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A new homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation in the attic of her new home. The insulated area is 1,500 square feet. The upgrade from R-11 to R-19 insulation costs $0.1 per square foot. The upgraded insulation is expected to save Ms. Dee Young approximately 400 kilowatt hours of energy usage per year. The planning horizon is 20 years and electricity costs $0.08/kWh. MARR is 10% per year.

A new homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation in the attic of her new home. The insulated area is 1,500 square feet. The upgrade from R-11 to R-19 insulation costs $0.1 per square foot. The upgraded insulation is expected to save Ms. Dee Young approximately 400 kilowatt hours of energy usage per year. The planning horizon is 20 years and electricity costs $0.08/kWh. MARR is 10% per year.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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what is the future worth of R-19 
Please solve by hand or using formula table

A new homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation in the attic of her new home. The insulated area is 1,500 square feet. The upgrade from R-11 to R-19 insulation costs $0.10 per square foot. The upgraded insulation is expected to save Ms. Dee Young approximately 400 kilowatt-hours of energy usage per year. The planning horizon is 20 years and electricity costs $0.08/kWh. The Minimum Acceptable Rate of Return (MARR) is 10% per year.
Transcribed Image Text:A new homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation in the attic of her new home. The insulated area is 1,500 square feet. The upgrade from R-11 to R-19 insulation costs $0.10 per square foot. The upgraded insulation is expected to save Ms. Dee Young approximately 400 kilowatt-hours of energy usage per year. The planning horizon is 20 years and electricity costs $0.08/kWh. The Minimum Acceptable Rate of Return (MARR) is 10% per year.
Expert Solution
Step 1: Given the information:-

Insulated area = 1,500 square feet

Insulation costs  =$0.10 per square foot

Savings due to upgraded insulation = 400 kilowatt hours of energy usage per year

Time= 20 years

Electricity costs =$0.08/kWh

MARR =10%


Required: Future worth of R-19 insulation 

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