Matching Supply with Demand 3rd Edition by Gerard Cachon,Christian Terwiesch

Exercise 2

A consumer who lives in New York switches from a 60 watt incandescent light bulb to an 8 watt LED. Assume usage remains the same, which is 4 hours per day on average. Electricity costs the consumer $0.12 per kWh. (A kWh is the amount of electricity need to produce 1000 watts of energy for 1 hour.) The incandescent light bulb costs $0.40. The LED costs $12.00. The LED lasts 27,000 hours whereas the incandescent light bulb lasts 1000 hours.
a. Including the cost of replacement bulbs and the cost of electricity, how long does it take for the LED to breakeven (That is, after how much time will the consumer have spent as much with the LED as with the incandescent light bulb.)
b. The consumer's electricity emits 450 kgs CO₂ /MWh. (1 MWh = 1000 kWh.) How many kgs of CO₂ would the consumer emit to operate the 60 watt light bulb for one year