1. Compact fluorescent lamps (CFLs) have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent lightbulb costs $0.45 and lasts for 1,000 hours. A 15-watt CFL, which provides the same light, costs $3.40 and lasts for 12,000 hours. A kilowatt hour of electricity costs $0.121, which is about the national average. A kilowatt-hour is 1,000 watts for 1 hour. (12 points) The equivalent annual cost of each lightbulb is -$1.29.
2. However, electricity costs actually vary quite a bit depending on location and user type. An industrial user in South Dakota might pay $.04 per kilowatt-hour whereas a residential user in Colorado might pay $.25. What is the break-even cost per kilowatt-hour? (2 points)