brewer12345
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 6, 2003
- Messages
- 18,085
I have a large, old upright freezer in the basement that I finally got around to putting a Kill-A-Watt on and the power consumption is breathtaking. Armed with good consumption data, I am crunching the numbers on buying a modern replacement. It has been a long time since I did XIRR calcs in Excel and I would appreciate it if someone could check my math.
I took the difference between the monster's power usage and the stated annual power consumption of an inexpensive option at Home Depot, multiplied it by my marginal per kwh cost of power and assumed that the annual savings would be received all at once in one year's time and every year thereafter for 10 years (then no cash flows). So $625 of cash out on 8/1/17 and then a series of cash flows in for 10 years starting 8/1/18. The cash flows in start at 121.29 and rise 2% annually (very conservative assumption based on my utility). I get an XIRR of 16.1% and a payback period of 5 years.
This seems like a no-brainer on a low risk proposition, no?
I took the difference between the monster's power usage and the stated annual power consumption of an inexpensive option at Home Depot, multiplied it by my marginal per kwh cost of power and assumed that the annual savings would be received all at once in one year's time and every year thereafter for 10 years (then no cash flows). So $625 of cash out on 8/1/17 and then a series of cash flows in for 10 years starting 8/1/18. The cash flows in start at 121.29 and rise 2% annually (very conservative assumption based on my utility). I get an XIRR of 16.1% and a payback period of 5 years.
This seems like a no-brainer on a low risk proposition, no?