Payback period and IRR of a Cost Reduction Proposal Differential Analysis A'Bight-emitong diode (LED) Is a semiconductor diode that emisnarrow-spectrum light. Although relatively expensive when compared to incandescent buds, they use significantyless energy and last six to ten times longer with a slow decline in performance rather than an abrupt failure Metropolitan City currently has 40,000 incandescent bulbs in traffic lights at appro imately 6.000 intersections. It is estimated that replacing all the incandescent bulbs with LEDs will cost $17.7 milion. However the investment is also estimated to save the city 54.42 million per year in energy costs 0 b. Determine the payback period of converting Metropolitan City traffic lights to LEDS Round answer to one decimal place * years to at the average life of an incandescent streetlight is one year and the average ife of an LED streetlight is seven years should the oty finance the investment in LEDs at an Interest rate of 5per year? justify your answer 1.Compute the internal rate of return on the project Round to the nearest whole percent 0 2. Select the most appropriate answer based on computation No, the City should not make the investment because the IRR of the investment in LEDS 31.25 of the interest rate Cres the city should make the investment because the IRR of the investment in LEDS 5 31.35% of the interest rate No, the City should not make the investment because the IRR of the investment in LEDs 320 of the interest rate Yes, the City should make the investment because the IRR of the investment in LEDS 320% of the interest rate Ch Payback period and IRR of a Cost Reduction Proposal Differential Analysis Allght-emitting diode (LED) is a semiconductor diode that emits narrow.spectrum light. Although relatively expensive when compared to incandescent bulbs, they use significantly less energy and last six to ten times longer, with a slow decline in performance rather than an abrupt fallure. Metropolitan City currently has 40,000 incandescent bulbs in traffic lights at approximately 6,000 intersections. It is estimated that replacing all the incandescent bulbs with LEDs will cost $17.7 million. However, the investment is also estimated to save the city $4.42 million per year in energy costs Determine the payback period of converting Metropolitan City traffic lights to LED Round answer to one decimal place. o x years bIf the average life of an incandescent streetlight is one year and the average life of an LED Streetlight is seven years, should the city finance the investment in LEDs at an interest rate of 5% per year? justify your answer Compute the internal rate of return on the project, Round to the nearest whole percent. X 0