What is the break-even cost per

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
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Light emitting diode (LEDs) light bulbs have become required in recent years, but do
they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.51
and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.70 and
lasts for 12,000 hours. A kilowatt hour of electricity costs $.127. A kilowatt-hour is 1,000
watts for 1 hour. However, electricity costs actually vary quite a bit depending on location
and user type. An industrial user in West Virginia might pay $.04 per kilowatt-hour
whereas a residential user in Hawaii might pay $.25. You require a return of 10
percent and use a light fixture 500 hours per year. What is the break-even cost per
kilowatt-hour? (Do not round intermediate calculations and round your answer to 6
decimal places, e.g., 32.161616.)
Transcribed Image Text:Light emitting diode (LEDs) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.51 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.70 and lasts for 12,000 hours. A kilowatt hour of electricity costs $.127. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type. An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25. You require a return of 10 percent and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)
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