Asked by
Thaweesidhi Tatiyapermpoon
on Oct 14, 2024
Verified
Shivers's annual fuel bill for home heating is 800 dollars per year.He considers three alternative plans for insulating his house.Plan A would reduce his annual fuel bill by 15%, plan B would reduce it by 20%, and plan C would eliminate his need for heating fuel altogether.The plan A insulation job would cost Shivers 800 dollars, plan B would cost him 1,100, dollars, and plan C would cost him 8,800 dollars.If the interest rate is 10% and his house and the insulation job last forever, which plan is the best for Shivers?
A) Plan A.
B) Plan B.
C) Plan C.
D) Plans A and B are equally good.
E) He is best off using none of the plans.
Insulation Job
A service or project involving the application of insulating materials to buildings or structures to reduce energy consumption by maintaining temperature.
Annual Fuel Bill
The total cost incurred by an individual or organization for fuel over the course of a year.
Interest Rate
The cost of borrowing money, typically expressed as a percentage of the amount borrowed, or the return on investment for savings.
- Evaluate the cost-effectiveness of various long-term investment plans based on interest rate assumptions.
Verified Answer
WC
Learning Objectives
- Evaluate the cost-effectiveness of various long-term investment plans based on interest rate assumptions.