Focus on the difference between feasible alternatives (Principle 2)l Insulated c

Question

Focus on the difference between feasible alternatives (Principle 2)l Insulated concrete forms (ICF) can be used as a substitute for conventional wood framing in building construction. Heating and cooling bills will be about 60% less than in a similar wood-framed building in upstate New York An ICF home will be approximately 20% more expensive to construct than a wood-framed home. For a typical 2,100 ft2 home costing $130 ft2 to construct in upstate New York and costing $280 per month to heat and cool, how many months does it take for a 2,100 ft2 ICF home to pay back its extra construction cost?

Explanation / Answer

Thanks for the question
Construction cost of ICF home = 2100*130 = 273000
(which is 20% more than wooden frame home)
Construction cost of wooden frame home = 273000/1.2 = 227500
Extra cost of construction = 273000 - 227500 = 45500
Heating and cooling expense for ICF per month = 280
(which is 60% less than wooden frame)
Heating and cooling expense per month for wooden frame = 280/0.4 = 700
Savings from heating and cooling bill = 700- 280 = 420
No of months to payback extra construction cost = 45500/420
= 108.33

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