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Compute the net present value of the investment discounted

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JackJoe, Inc. has an opportunity to purchase solar panels for its administration building. The details of this investment are below:

Question 1. Compute the payback period of this investment

Question 2. Compute the Net Present Value of this investment discounted at 5% for 10, 20 and 30 years

Cost of solar panels                                                                              15,000

Federal tax credit                                                                                  3,900

Net investment                                                                                     9,100

Annual investment returns (reduced electricity expense, net of tax deduction)  1,500

Discount rate                                                                                       5.00%

Present value of annuity money factor 10 periods 5% discount rate              7.7217

Present value of annuity money factor 20 periods 5% discount rate             12.4622

Present value of annuity money factor 30 periods 5% discount rate               15.3725

Present value of annuity money factor 40 periods 5% discount rate                  17.1591

Reference no: EM132533742

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