Light emitting diodes (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.43 and lasts 1,000 hours. A 15-watt LED, which provides the same light, costs $3.30 and lasts for 12,000 hours. A kilowatt-hour of electricity costs $.119. A kilowatt-hour is 1,000 watts for 1 hour. If you require a return of 10 percent and use a light fixture 500 hours per year, what is the equivalent annual cost of each light bulb? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 60-watt incandescent light bulb LED light bulb $ $ 3.82 1.26

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
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Problem 10-28 Equivalent Annual Cost [LO4]
Light emitting diodes (LED) light bulbs have become required in recent years, but do
they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.43
and lasts 1,000 hours. A 15-watt LED, which provides the same light, costs $3.30 and
lasts for 12,000 hours. A kilowatt-hour of electricity costs $.119. A kilowatt-hour is 1,000
watts for 1 hour. If you require a return of 10 percent and use a light fixture 500 hours per
year, what is the equivalent annual cost of each light bulb? (A negative answer should
be indicated by a minus sign. Do not round intermediate calculations and round your
answers to 2 decimal places, e.g., 32.16.)
60-watt incandescent light bulb
LED light bulb
$
$
3.82
1.26
Transcribed Image Text:Problem 10-28 Equivalent Annual Cost [LO4] Light emitting diodes (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.43 and lasts 1,000 hours. A 15-watt LED, which provides the same light, costs $3.30 and lasts for 12,000 hours. A kilowatt-hour of electricity costs $.119. A kilowatt-hour is 1,000 watts for 1 hour. If you require a return of 10 percent and use a light fixture 500 hours per year, what is the equivalent annual cost of each light bulb? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 60-watt incandescent light bulb LED light bulb $ $ 3.82 1.26
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