1. Exercise

If you insulate your office for $25,000, you will save $2,500 a year in heating expenses. These savings will last forever. a. What is the NPV of the investment when the cost of capital is 4%? 10%? NPV Cost of Capital 4% 10% b. What is the IRR of the investment? (Enter your answer as a whole percent.) IRR % c. What is the payback period on this investment? Payback period years