The answer in the box is incorrect, can\'t figure out the value. Please show wor

Question

The answer in the box is incorrect, can't figure out the value. Please show work, thank you

? ??1,11 20% ? 1:33 PM ? ? https://www.mathxl.com/Student/PlayerHomework.aspx?homeworl ® 1 EC 200 Englneering Economlcs Summer Sesslon 1 (2018) Joseph Ilonsinger &6/2618 1:33 PM Homework: Comparison and Selection Among Alternatives Score: 0 of 1 pt Problem 6-20 (algorithmic) 49 nf 17 14 complete) Score: 76.23%, 12.96 of 17 pts i Question Help Insulated i nci et forma ICF can be used as a substitute for traditional d framing in building construction. Heating and cooling Lills will be about 45% less than in a sit nila' wood-frame home in Vermont An ICF hon e will be approximately 15? mare expensive to eanstri e: Ihan a woo trane home. A t pical 1 squere foot home costs $120 per squere foot to build with wood freming in Vermont and costs $245 per month (on average) to heat or cool. Whet is the IRR on the Incrementel Investment in an equtvalent-sized ICF home? The home's resdual value wth botn framing methods in 22 years la expected to be $280,DDD. Assume annual compounding The IRR is2 (Round to the nearest whole number) Enter your answer in the answer box and then click Check Answer.

Explanation / Answer

Initial investment (PV):

= -1,800×$120×15%

= -$32,400

Saving per month (PMT):

= $245×0.45

= $110.25

Number of months (NPER):

= 20×12

= 240

COMPUTE for RATE

IRR for 1 month = -0.1627%

IRR in annual terms = -1.95% annul terms

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