Terra Industries is evaluating investing in solar panels to provide some of the electrical needs of its

Question:

Terra Industries is evaluating investing in solar panels to provide some of the electrical needs of its main building in Tempe, Arizona. The solar panel project would cost $540,000 and would provide cost savings in its utility bills of $67,500 per year. It is anticipated that the solar panels would have a life of 20 years and would have no residual value.
Requirements
1. Calculate the in years of the solar panel project.
2. If the company uses a of 8%, what is the of this project?
3. If the company has a rule that no projects will be undertaken that would have a of more than five years, would this investment be accepted? If not, what arguments could the energy manager make to try to obtain approval for the solar panel project?
Net Present Value
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