Should the homeowner replace the current windows

Reference no: EM132207605

Question: The heat loss through the windows of a home is estimated to cost the homeowner $400 per year in wasted energy. The homeowner is considering replacing the current windows by thermal windows. The thermal windows will reduce heat loss by 80% and can be installed for $1.232. The windows will have salvage value of $100 at the end of their estimated life of 8 years.

(a) Determine the net present equivalent value of the windows if the interest rate is 10 percent

(b) Should the homeowner replace the current windows by thermal windows or not? Why?

Reference no: EM132207605

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