Question
If you decide to replace your heating/AC, it will cost you $10,000 today. Your average energy cost will be cut almost in half (down to
If you decide to replace your heating/AC, it will cost you $10,000 today. Your average energy cost will be cut almost in half (down to $200 a month) and you will no longer need to carry the appliance insurance. However, you anticipate the new system to last only 10 years, at which point it will have to be replaced. Would you want to replace your HVAC system if you could borrow using a home improvement loan at 5.99% APR (compounded monthly)? Find the NPV to justify your decision.
What if your loan application was denied and your only option was to charge the cost to your credit card? Assume the interest rate is 19.99% APR compounded MONTHLY.
How to use finical calculator to calculator this
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A Study In Public Finance
Authors: A. C. Pigou
1st Edition
1443722766, 978-1443722766
