Cost-volume-profit analysis can also be used in making personal financial decisions. Let's say you are considering purchasing a furnace and are looking to buy one that will save you energy costs. You have already narrowed down your decision to two possible teams with the following information:

	conventional oven	convection oven
Capacity	6 cubic feet	6 cubic feet
Watts	1,500 watts	1,500 watts
Intake	1.2 kWh/hour	0.6 kWh/hour
Equipment cost	$900	$1,500

The cost of electricity in your city is $.19 per kWh.

The average useful life of an oven is 12 years.

The average time a family like yours uses an oven is 500 hours a year.

Based on the information provided:

1. What is the variable electricity cost per year for each oven?
2. Using the answer to the previous question, What is the "marginal contribution" of the most efficient oven in relation to the least efficient one? That is, express the annual energy savings of the most efficient equipment.
3. If the savings in energy costs are equal to the additional fixed cost of acquiring the most efficient oven, we can say that we have reached the break-even point of this investment. Ignoring the present value of money, how many years will it take you to break even if you invest in the most efficient equipment? That is, how many years will it take to recover the additional fixed cost required by the more efficient equipment?