1. The following was in the Wall Street Journal. "Indoor sprinklers can save on insurance rates by providing added protection. By one estimate, the savings over 30 years would pay for the system, but high-rise buildings are often built by speculators who plan to sell them far sooner than that."

a. Why is the fact that builders soon sell the buildings irrelevant?

b. Suppose a sprinkler system costs $30,000 to install and produces savings in insurance premiums of $1,000 per year. How many years of such savings would be required to justify the expenditure?