An energy conservation option has a first cost of $50,000. It requires $4000 per year maintenance and saves $10,000 per year in utilities. What is the simple payback period for the option
1 answer:
Answer:
8.3333 years or 8 years and 4 months.
Explanation:
Initial cost = $50,000
Amount recovered on the investment per year = $10,000 - $4,000 = $6,000
The simple payback period is given by dividing the initial cost by the amount recovered per year:
The simple payback period is 8.3333 years or 8 years and 4 months.
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