Solved: Determine the payback period on the investment, Finance Basics

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Determine the payback period on the investment

Question: Investment Criteria. If you insulate your office for $10,000, you will save $1,000 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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Finance Basics: Determine the payback period on the investment

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