A public school is being renovatedfor $18 million. The building hasgeothermal heating and cooling,high-efficiency windows, and a solararray that permits the school to sellelectricity back to the local electricutility. The annual value of thesebenefits is estimated to be $3 million.In addition, the residual value of theschool at the end of its 40-year life isnegligible. What is the simplepayback period and internal rate ofreturn for the renovated school?

Payback period is the total time required to cover the initial cost of investment.

Answered: In addition, the residual value of the…

In addition, the residual value of the school at the end of its 40-year life is negligible. What is the simple payback period and internal rate of return for the renovated school?

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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