Question:

All of these amounts ignore the time value of money. What does that mean? What is not included in these calculations that could cause the final decision to be different (from a financial standpoint)?

Hartz Company is looking to start a CSR program involving installing solar panels on the roof of the building. Information on the investment is as follows: Initial Cost of Project: Estimated Savings Per Year Variable Cost Per Year Estimated Life of Project $150,000 20,000 5,000 20 years Required What are the net savings per year? What are the net savings over the life of the project? What is the estimated payback time in years? (round to two decimals) = Questions What are the net savings per year? What are the net savings over the life of the project? What is the estimated payback time? Answers 20,000 5,000 = 15,000 15,000 x 20 = 300,000 = 150,000/15,000 = 10 =