Cost-volume-utility analysis can also be used in personal financial decision making. Let's say you're considering replacing your current fridge (refrigerator) with a new one that saves you on the cost of energy. You have already managed to reduce your decision to two potential teams with the following information:

	Refrigerator A	Refrigerator B
Capacity	19 cubic feet	19 cubic feet
Annual consumption	615 kWh	302 kWh
Cost of equipment	$914	$1,300

The cost of electricity in your city is $0.137 per kWh.

REQUIRED: Using the above data, answer the following questions.

1. What is the variable cost of electricity per year for each refrigerator?

	Refrigerator A	Refrigerator B
Annual variable cost

2. Using the answer to the previous question, what is the "contribution margin" of the most efficient refrigerator relative to the least efficient? That is, express the annual energy savings of the most efficient equipment.

3. How many years will it take you to reach the break-even point if you invest in the most efficient equipment? That is, how many years it will take you to recover the additional investment required by the most efficient equipment.

4. What other factors should you consider when making the decision about this purchase?