Light emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.37 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.00 and lasts for 12,000 hours. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence with a lot of incandescent bulbs that are used on average 500 hours a year. The average bulb will be about halfway through its life, so it will have 500 hours remaining (and you can't tell which bulbs are older or newer). If you require a return of 10 percent, at what cost per kilowatt-hour does it make sense to replace your incandescent bulbs today? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)
Light emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.37 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.00 and lasts for 12,000 hours. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence with a lot of incandescent bulbs that are used on average 500 hours a year. The average bulb will be about halfway through its life, so it will have 500 hours remaining (and you can't tell which bulbs are older or newer). If you require a return of 10 percent, at what cost per kilowatt-hour does it make sense to replace your incandescent bulbs today? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 10-30 Break-Even Replacement [LO2]
Light emitting diode (LED) light bulbs have become required in recent years, but do they
make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.37 and
lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.00 and lasts
for 12,000 hours. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence
with a lot of incandescent bulbs that are used on average 500 hours a year. The average
bulb will be about halfway through its life, so it will have 500 hours remaining (and you
can't tell which bulbs are older or newer). If you require a return of 10 percent, at what
cost per kilowatt-hour does it make sense to replace your incandescent bulbs today? (A
negative answer should be indicated by a minus sign. Do not round intermediate
calculations and round your answer to 6 decimal places, e.g., 32.161616.)
Break-even cost
$
0.001242](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c546686-9e61-4e1b-a870-cd788ae278a1%2Fc8ea93c9-e9aa-4715-be11-cf2847efef0b%2Ftmtvgkl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 10-30 Break-Even Replacement [LO2]
Light emitting diode (LED) light bulbs have become required in recent years, but do they
make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.37 and
lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.00 and lasts
for 12,000 hours. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence
with a lot of incandescent bulbs that are used on average 500 hours a year. The average
bulb will be about halfway through its life, so it will have 500 hours remaining (and you
can't tell which bulbs are older or newer). If you require a return of 10 percent, at what
cost per kilowatt-hour does it make sense to replace your incandescent bulbs today? (A
negative answer should be indicated by a minus sign. Do not round intermediate
calculations and round your answer to 6 decimal places, e.g., 32.161616.)
Break-even cost
$
0.001242
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