# A process furnace upgrade costs $100,000 and will save $20,000 per year in fuel over its 10-year lif

**A process furnace upgrade costs $100,000 and will save $20,000 per year in fuel over its 10-year lifetime. Fuel prices are projected to escalate 8% per year over this period.**

- Draw the cash flow diagram.

- Find the simple payback SP.

- Find the rate of return ROR.

- Assuming a discount rate of 5%, find the net present value NPV of savings.

- Find the return on investment ROI (also called the internal rate of return IRR in Excel).