If you insulate your office for $1,000, you will save $100 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%? 10%?
b. What is the IRR of the investment?
c. What is the payback period on this investment?
d. What is the discounted payback period on this investment when the cost of capital is 8%? 10%?