A municipality is considering an investment in a small renewable energy power plant with the following parameters: • Cost $360,000 Average output 50 kW year-round. (This means that on the average the plant generates 50 kWh of electricity for every hour in a year) • Electricity price at the plant gate $0.039/kWh • Expected salvage value $20,000 The investment is to be evaluated over a 25-year period, and the MARR is 6% Calculate NPV of this investment and find out if the project is financially attractive? Using this formula, please show step by step calculations. NPV-Initial Cost +S(Annuities) + Salvage Value

A municipality is considering an investment in a small renewable energy power plant with the following parameters: • Cost $360,000 Average output 50 kW year-round. (This means that on the average the plant generates 50 kWh of electricity for every hour in a year) • Electricity price at the plant gate $0.039/kWh • Expected salvage value $20,000 The investment is to be evaluated over a 25-year period, and the MARR is 6% Calculate NPV of this investment and find out if the project is financially attractive? Using this formula, please show step by step calculations. NPV-Initial Cost +S(Annuities) + Salvage Value

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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