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Investment Criteria

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Problem 19. (Section four) Investment Criteria. If you insulate your office for $1,000, you will save $100 a year in heating expenses. These savings will last forever.
a. What is the NPV of the investment when the cost of capital is 8 percent? 10 percent?
b. What is the IRR of the investment?
c. What is the payback period on this investment?

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a. NPV of the investment can be calculated as Payment/rate - Investment ...

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