Determine the maximum cost of cfb fixtures and bulbs

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Reference no: EM131506235

Question: Bob and Sally have just bought a new house and they are considering the installation of 10 compact fluorescent bulb (CFB) fixtures instead of the 10 conventional incandescent lighting fixtures (which cost a total of $500) typically installed by the builder. According to the home builder, CFBs use 70% less electricity than incandescent bulbs, and they last 10 times longer before the bulb needs replacement. Bob calculates that 1,000 watts of incandescent lighting will be required in the house for 3,000 hours of usage per year. The cost of electricity is $0.10 per kWh. Also, each CFB will save 150 pounds of CO2 per year. Each pound of CO2 has a penalty of $0.02. If incandescent bulbs cost $0.75 each and last for one year, use a 10-year study period to determine the maximum cost of CFB fixtures and bulbs that can be justified in this house. MARR = 8% per year.

Reference no: EM131506235

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