Question: A renewable energy project costs $500,000 and is expected to save $50,000 annually in energy costs. How many years will it take to break even?
Options:
5 years
10 years
15 years
20 years
Correct Answer: 10 years
Solution:
$500,000 / $50,000 = 10 years
A renewable energy project costs $500,000 and is expected to save $50,000 annual
Practice Questions
Q1
A renewable energy project costs $500,000 and is expected to save $50,000 annually in energy costs. How many years will it take to break even?
5 years
10 years
15 years
20 years
Questions & Step-by-Step Solutions
A renewable energy project costs $500,000 and is expected to save $50,000 annually in energy costs. How many years will it take to break even?
Step 1: Identify the total cost of the renewable energy project, which is $500,000.
Step 2: Identify the annual savings from the project, which is $50,000.
Step 3: To find out how many years it will take to break even, divide the total cost by the annual savings.
Step 4: Perform the calculation: $500,000 divided by $50,000 equals 10.
Step 5: Conclude that it will take 10 years to break even.
Break-even Analysis – Calculating the time required for an investment to recover its initial cost through savings or profits.
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