Question $39$ of $50$

A local university decides to install motion$-$detection light switches in the faculty offices. The cost savings associated with these switches is $$1\mathrm{.}44$ per year for each year of a switch's $15-$year life. This gres a total cost savings of $$21\mathrm{.}60$ per switch. The purchase cost of each light switch was $$20.$ What should the university keep in mind about this decision to install motiondetection light switches in the faculty offices?

Present value calculations are only one input, among many, to consider in making this decision.

Present value calculations are the only relevant to consider in making this decision.

Because the present value of the cost savings was less than the initial cost of the light switches, do not install the light switches.

Because the present value of the cost savings was greater than the initial cost of the light switches, go ahead and install the light switches.