Traditional wood framing in building construction

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Reference no: EM131510991

Insulated concrete forms (ICF) can be used as a substitute for traditional wood framing in building construction. Heating and cooling bills will be about 45% less than in a similar wood-frame home in Vermont. An ICF home will be approximately 6% more expensive to construct than a wood-frame home. A typical 2.200 square foot home costs $140 per square foot to build with wood framing in Vermont and costs $175 per month (on average) to heat or cool. What is the IRR on the incremental investment in an equivalent-sized ICF home? The home's residual value with both framing methods in 16 years is expected to be $280,000. Assume annual compounding.

Reference no: EM131510991

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