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Consider an all electric household in Sydney that uses an average of 32 kWh per day (cost of electricity $0.12/kWh). If a discount rate of 7% and an inflation rate of 3% are assumed, calculate how much money can be spent on energy efficiency measures (at year zero) to give a Net Present Value of zero after 8 years, assuming that this expenditure achieves a 70% reduction in energy usage.

Financial Management, Finance

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