Simon Manufacturing Is Conducting Preliminary Research into Installing a Geothermal

Simon Manufacturing is conducting preliminary research into installing a geothermal heat pump to heat and cool its factories and offices. The initial cost of installing the new system is $245,000; however, Simon will save $35,000 annually on its heating and cooling costs. The system has an expected life of 15 years. What is the net present value (NPV) of the project, assuming a discount rate of 8%?

A) $54,565
B) $(233,975)
C) $299, 565
D) $11,025

Correct Answer:

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