Insulated concrete forms (ICF) can be used as a substitute for traditional wood framing in building construction. Heating and cooling bills will be about 50% less than in a similar wood-frame home in Vermont. An ICF home will be approximately 10% more expensive to construct than a wood-frame home. A typical 2,000 square-foot home costs $120 per square foot to build with wood framing in Vermont and costs $200 per month (on average) to heat or cool.What is the IRR on the incremental investment in an equivalent-sized ICF home? The home’s residual value with both framing methods in 20 years is expected to be $280,000.

Insulated concrete forms (ICF) can be used as a substitute for traditional wood framing in building construction. Heating and cooling bills will be about 50% less than in a similar wood-frame home in Vermont. An ICF home will be approximately 10% more expensive to construct than a wood-frame home. A typical 2,000 square-foot home costs $120 per square foot to build with wood framing in Vermont and costs $200 per month (on average) to heat or cool.What is the IRR on the incremental investment in an equivalent-sized ICF home? The home’s residual value with both framing methods in 20 years is expected to be $280,000.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.4IP

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