What is the effective interest rate if they do not pay cash

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A) As you may remember Lockheed Martin's Oldsmar facility unveiled a $5 million, 2.25-megawatt solar array.

With this system, the company is slashing its electric bill by $350,000 annually. (This is an estimate.) It is expected to run for 25 years.

What is its rate of return on investment?

B) The company can pay cash, $5 million, or pay $1 million now and $625 thousand each year for 8 years.

What is the effective interest rate if they do not pay cash?

Reference no: EM132151444

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