If you insulate your office for $22,000, you will save $2,200 a year in heating expenses. These savings will last forever.
a. What is the NPV of the investment when the cost of capital is 5%? 10%?
Cost of Capital NPV
5% $
10%
b. What is the IRR of the investment?
IRR %
c. What is the payback period on this investment?