Question: A renewable energy project costs $500,000 and is expected to save $100,000 annually in energy costs. How many years will it take to break even?
Options:
3 years
4 years
5 years
6 years
Correct Answer: 5 years
Solution:
$500,000 / $100,000 = 5 years
A renewable energy project costs $500,000 and is expected to save $100,000 annua
Practice Questions
Q1
A renewable energy project costs $500,000 and is expected to save $100,000 annually in energy costs. How many years will it take to break even?
3 years
4 years
5 years
6 years
Questions & Step-by-Step Solutions
A renewable energy project costs $500,000 and is expected to save $100,000 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 $100,000.
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 $100,000 equals 5.
Step 5: Conclude that it will take 5 years to break even.
Break-even Analysis – Calculating the time it takes for an investment to pay for itself through savings or profits.
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