Light-emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.45 and lasts for 1,000 hours. A 7-watt LED, which provides the same light, costs $2.25 and lasts for 40,000 hours. A kilowatt-hour of electricity costs $.121, which is about the national average. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type (you can get information on your rates from your local power company). An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25. You require a 10 percent return and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.) ✓ Answer is complete but not entirely correct. Break-even cost $ 0.003916 14 Your small remodeling business has two work vehicles. One is a small passenger car used for job site visits and for other general business purposes. The other is a heavy truck used to haul equipment. The car gets 25 miles per gallon (mpg). The truck gets 10 mpg. You want to improve gas mileage to save money, and you have enough money to upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded car will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $2.65 per gallon. Suppose you drive the truck 12,000 miles per year. How many miles would you have to drive the car before upgrading the car would be the better choice? Number of miles
Light-emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.45 and lasts for 1,000 hours. A 7-watt LED, which provides the same light, costs $2.25 and lasts for 40,000 hours. A kilowatt-hour of electricity costs $.121, which is about the national average. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type (you can get information on your rates from your local power company). An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25. You require a 10 percent return and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.) ✓ Answer is complete but not entirely correct. Break-even cost $ 0.003916 14 Your small remodeling business has two work vehicles. One is a small passenger car used for job site visits and for other general business purposes. The other is a heavy truck used to haul equipment. The car gets 25 miles per gallon (mpg). The truck gets 10 mpg. You want to improve gas mileage to save money, and you have enough money to upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded car will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $2.65 per gallon. Suppose you drive the truck 12,000 miles per year. How many miles would you have to drive the car before upgrading the car would be the better choice? Number of miles
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Light-emitting diode (LED) light bulbs have become required in recent years, but do they
make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.45 and
lasts for 1,000 hours. A 7-watt LED, which provides the same light, costs $2.25 and lasts
for 40,000 hours. A kilowatt-hour of electricity costs $.121, which is about the national
average. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary
quite a bit depending on location and user type (you can get information on your rates
from your local power company). An industrial user in West Virginia might pay $.04 per
kilowatt-hour whereas a residential user in Hawaii might pay $.25.
You require a 10 percent return and use a light fixture 500 hours per year. What is the
break-even cost per kilowatt-hour? (A negative answer should be indicated by a minus
sign. Do not round intermediate calculations and round your answer to 6 decimal
places, e.g., 32.161616.)
✓ Answer is complete but not entirely correct.
Break-even cost
$
0.003916
14
Transcribed Image Text:Your small remodeling business has two work vehicles. One is a small passenger car
used for job site visits and for other general business purposes. The other is a heavy
truck used to haul equipment. The car gets 25 miles per gallon (mpg). The truck gets 10
mpg. You want to improve gas mileage to save money, and you have enough money to
upgrade one vehicle. The upgrade cost will be the same for both vehicles. An upgraded
car will get 40 mpg; an upgraded truck will get 12.5 mpg. The cost of gasoline is $2.65
per gallon.
Suppose you drive the truck 12,000 miles per year. How many miles would you have to
drive the car before upgrading the car would be the better choice?
Number of miles
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