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The following revised illustration should have appeared in the May issue (p. 12, Performance Contracting Online) rather than the draft version that was published. EUN regrets the error.
Project cost ($) 368,000
Simple payback (years) 7
(months)
Interest rate (%) 5.00
Financing term (year) 10
Year(s) postponed 0
Option A (Fast Track Financing
Annual
Year Savings Cost Cash Flow
0 $51,974 ($46,839) $5,135
1 $51,974 ($46,839) $5,135
2 $51,974 ($46,839) $5,135
3 $51,974 ($46,839) $5,135
4 $51,974 ($46,839) $5,135
5 $51,974 ($46,839) $5,135
6 $51,974 ($46,839) $5,135
7 $51,974 ($46,839) S5,135
8 $51,974 ($46,839) $5,135
9 $51,974 ($46,839) $5,135
10 $51,974 $0 $51,974
11 $51,974 $0 $51,974
Net Present Value of Option A
Option A Option B (Waiting for) Cash)
(Fast Track
Financing
Cumulative ...