Make sense to replace your incandescent bulbs today

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Reference no: EM131958640

Compact fluorescent lamps (CFLs) have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent lightbulb costs $.41 and lasts for 1,000 hours. A 15-watt CFL, which provides the same light, costs $3.20 and lasts for 12,000 hours. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence with a lot of incandescent bulbs that are used on average 500 hours a year. The average bulb will be about halfway through its life, so it will have 500 hours remaining (and you can’t tell which bulbs are older or newer).

If you require a 9 percent return, at what cost per kilowatt-hour does it make sense to replace your incandescent bulbs today?

This is how I set it up, [-$0.41 - (60 / 1000 x 500 x C) PVIFA9%, 1] / PVIFA9%, 1 = [-$3.20 - (15 / 1000 x 500 x C) PVIFA9%, 24] / PVIFA9%, 24 What is C?

Reference no: EM131958640

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