JWI530 Week 1 | Financial Markets in Economics - Strayer university

Question 7Chester Franks is considering installing solar panels on his house to decrease his electricity costs. Chester has a proposal that will cost $25,450 for a complete installation. Engineers have estimated that Chester will save an average of 26% from his electricity usage from the grid. Also, engineers have projected that Chester will be able to put power back into the grid 10% of the time, which will further reduce his electricity bill by 7.6%. Chester's current average monthly bill for electricity is $656.00. Chester has his liquid funds invested in a small cap account that earns 9.93%. The funds for this investment would come from this account. The estimated life of the solar panels is 55 years. Which of the following are ?

Answers:

A. Payback is 9 years, 7 months

B. The projected annual savings is $2,645

C. One of the most widely used techniques in CBA is discounted cash flow (DCF)

D. All answers are