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Your manufacturing company assembles electrical generators in a 120,000 SF factory building. After researching energy-efficient lighting systems for the building, you find one that reduces
Your manufacturing company assembles electrical generators in a 120,000 SF factory building. After researching energy-efficient lighting systems for the building, you find one that reduces utility bills by $.25/ SF per year. The cost of installation is $0.75 /SF. You plan to sell the building at the end of Year 5 and relocate your plant. Assume that the building sells for $50,000 more at that time, due to the increased in value from the lighting system. Considering the energy cost savings and the increased resale value at the end of the holding period, what is the net (after installation cost) increase in present value of - the building? Use a discount rate of 9%. $59,186 $49,291 $52,588 $58,516
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