4) You own a rental building in Providence and are interested in replacing the heating system for the building. You have the following alternatives:

a) A solar heating system, which will cost $12,000 to install, $500 a year to run, and will last for 15 years

b) A gas-heating system, which will cost $5.000 to install, $1000 a year to run, and will last for 20 years

c) An oil-based heating system, which will cost $3,500 to install, $1.200 a year to run, and will last for 10 years.

If the cost of capital is 10%, calculate the payback period and discounted payback of each of the projects? Which of these three options is best for you?