A retail outlet is being designed in a strip mall in Nebraska. For this outlet, the installed fiberglass insulation to protect against heat loss in the winter and heat gain in the summer will cost an estimated $100,000. The annual savings in energy due to the insulation will be $17,000 at EOY one in the 8-year life of the outlet, and these savings will increase 15% each year thereafter. If the annual interest rate is 18%, is the cost of the proposed amount of insulation justified? Click the icon to view the interest and annuity table for discrete compounding when ;= 15% per year. Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year. The present equivalent of energy savings is $. (Round to the nearest dollar.) Is the cost of the proposed amount of insulation justified? O Yes

A retail outlet is being designed in a strip mall in Nebraska. For this outlet, the installed fiberglass insulation to protect against heat loss in the winter and heat gain in the summer will cost an estimated $100,000. The annual savings in energy due to the insulation will be $17,000 at EOY one in the 8-year life of the outlet, and these savings will increase 15% each year thereafter. If the annual interest rate is 18%, is the cost of the proposed amount of insulation justified? Click the icon to view the interest and annuity table for discrete compounding when ;= 15% per year. Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year. The present equivalent of energy savings is $. (Round to the nearest dollar.) Is the cost of the proposed amount of insulation justified? O Yes

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A retail outlet is being designed in a strip mall in Nebraska. For this outlet, the installed fiberglass insulation to protect
against heat loss in the winter and heat gain in the summer will cost an estimated $100,000. The annual savings in
energy due to the insulation will be $17,000 at EOY one in the 8-year life of the outlet, and these savings will increase by
15% each year thereafter. If the annual interest rate is 18%, is the cost of the proposed amount of insulation justified?
Click the icon to view the interest and annuity table for discrete compounding when i = 15% per year.
Click the icon to view the interest and annuity table for discrete compounding when i = 18% per year.
The present equivalent of energy savings is $
Is the cost of proposed amount of insulation justified?
Yes
No
. (Round to the nearest dollar.)

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