A new furnace costs $$27,000$ to install and will require ongoing maintenance

expenditures of $$1,500$ per year. But, this furnace is far more fuel efficient than the

old furnace and will reduce fuel consumption of heating oil by $2,400$ gallons per

year. Heating oil this year will cost $$3\mathrm{.}00/$gallon$.$ The price per gallon is expected

to increase for $$0\mathrm{.}50/$gallon per year for the next $3$ years and then, stabilize for the

foreseeable future. The furnace will last for $20$ years, at which point it will need to

be replaced and it will have no salvage value. The discount rate is $8\%.$

Requirements:

a$)$ What is the payback period for the project? Round your answer to one decimal

place $($e$.$g$.,3\mathrm{.}2\%)$

b$)$ What is the net present value of the project? Round your answer to the nearest

whole dollar $($$$)$

c$)$ What is the IRR for the project? Round your answer to one decimal place $($e$.$g$.,$

$3\mathrm{.}2\%)$

NOTE: In your Excel spreadsheet, all calculations must be included