10-2. An environment friendly 2,800 square-foot green home (99% air tight) costs about 10% more to construct than a same-sized conventional home. Most green homes can save 25% per year on energy expenses to heat and cool the living space. For a $300,000 conventional home with a heating and cooling bill of

$3,000 per year, how much would have to be saved in energy expenses per year to justify this home (i.e., B–C ratio greater than or equal to one)? The discount rate is 12% per year, and the expected life of the home is 25 years. (10.7)