Case Scenario:
Fields is considering installing solar panels on his house to decrease his electricity costs. Chester has a proposal that will cost $25,450.00 for a complete installation. Engineers have estimated that he will save an average of 26% from his electricity use from the grid.the engineers have projected that Chester will be able to put power back into the grid by 10% of the time, which will further reduce his electrically by 7.6%. Mr. Fields current average monthly bill for electricity is $656.00 he has his liquid funds invested in a small cap account that earns 9.93%. the funds for the investment would come from this account. The estimated life of the panels is 55years.
1) what is his projected monthly savings
2) what is his projected annual savings
3) what is the present value of the outflows in this case
4) what is the present value of the annual inflows in this case
5) what is the approximate IRR on this investment
6) what is the playback period in years and months
7) should he make the investment