What is break-even cost per kilowatt-hour

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Reference no: EM131968258

Compact fluorescent lamps (CFLs) have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent lightbulb costs $.42 and lasts for 1,000 hours. A 15-watt CFL, which provides the same light, costs $3.25 and lasts for 12,000 hours. A kilowatt hour of electricity costs $.118, which is about the national average. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type. An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25.

You require a return of 11 percent and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour?

Reference no: EM131968258

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