Refer to Problem 5-2. Assuming the residual value of the building alone (no land) is negligible, the

Question:

Refer to Problem 5-2. Assuming the residual value of the building alone (no land) is negligible, the internal rate of return for this situation is closest to:

(a) 0%

(b) 4%

(c) 10%

(d) 20%


Data from Problem 5-2:

Buildings that are constructed to be environmentally responsible are referred to as “green buildings.” They cut down on energy consumption, increase water efficiency, improve indoor air quality, and use recycled materials in their construction. According to recent studies, money spent on a green building will pay for itself ten times over the 50-year life of the building. Assuming end-of-year annual savings of P/5, where P is the investment cost of the building, draw a cash flow diagram for this situation.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Engineering Economy

ISBN: 978-0133439274

16th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Question Posted: