When General Electric Company first introduced the Lucalox ceramic, screw-in light bulb, the bulb cost three and one-half times as much as an ordinary bulb but lasted five times as long. An ordinary bulb cost $1.00 and lasted about eight months. If a firm has a discount rate of 12 percent compounded three times a year, how much would it save in present value dollars by using one Lucalox bulb?

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