The heat loss through the exterior walls of a processing plant is estimated to cost the...
The heat loss through the exterior walls of a processing plant
is estimated to cost the owner $3,000
next year. A salesman from Superfiber, Inc. claims he can reduce
the heat loss by 80% with the
installation of $15,000 of Superfiber now. If the cost of heat loss
rises by $200 per year, after next
year (gradient), and the owner plans to keep the building ten more
years, what is his rate of return,
neglecting depreciation and taxes?
Homework Answers
Rate of return = 1 - (240/15000)^1/11 = 0.3133 = 31.33% (Ans)
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The heat loss through the exterior walls of a processing plant
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