A certain factory building has an old lighting system. Lighting the building currently costs, on average, $20,000

Question:

A certain factory building has an old lighting system. Lighting the building currently costs, on average, $20,000 a year. A lighting consultant tells the factory supervisor that the lighting bill can be reduced to $8,000 a year if $50,000 is invested in new lighting in the building. If the new lighting system is installed, an incremental maintenance cost of $3,000 per year must be taken into account. The new lighting system has zero at the end of its life. If the old lighting system also has zero , and the new lighting system is estimated to have a life of 20 years, what is the net annual benefit for this investment in new lighting? Take the to be 12%. Assume the old lighting system will last 20 years.
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