Question

the payback period for the equipment required for any alternative energy is how long it takes you to make up the cost of the equipment in energy cost savings. if the price of energy in your area increases, what happens to the payback period? the payback period decreases. you never get your money back.

Explanation:

Step1: Understand payback period formula

Payback period = Cost of equipment / Annual energy cost savings.

Step2: Analyze effect of energy price increase

When energy price increases, annual energy cost savings increase (assuming same energy usage).

Step3: Calculate new payback period

Since denominator (annual energy cost savings) increases and numerator (cost of equipment) is constant, the value of the fraction (payback period) decreases.

Answer:

The payback period decreases.