A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 300 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 30%, that electricity can be purchased at $0.10 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first. Approximately how many hours per year will the solar panels need to operate to enable this project to break even? 16,990.05 6,534.64 O 13,069.27
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- A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 400 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 20%, that electricity can be purchased at $0.30 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first. Approximately how many hours per year will the solar panels need to operate to enable this project to break even? a. 2,224.69 b. 1,112.35 c. 2,892.10 d. 2,447.16 If the solar panels can operate only for 2,002 hours a year at maximum, the project __________ break even. Continue to assume that the solar panels can operate only for 2,002 hours a year at maximum. In order for the project to be worthwhile (i.e., at least break even), the university would need a grant of…A university spent $1.8 million to install solar panels atop a parking garage. These panels will have a capacity of 500 kw, have a life expectancy of 20 years and suppose the discount rate is 10%. a. If electricity can be purchased for costs of $0.10 per kwh, how many hours per year will the solar panels have to operate to make this project break even? b. If efficient systems operate for 2,400 hours per year, would the project break even? c. The university is seeking a grant to cover capital costs. How big of a grant would make this project worthwhile (to the university)?4. Use AW method to calculate the benefit/cost ratio at i = 6% for a new library. The first cost is $500K, and O&M costs are $100K per year. There is no salvage value after 30 years. Community benefits are estimated to be $130K per year. Is the library economically justified? Write a brief interpretation of your answer.
- Complete solution 6. The Green Spaces project involves purchasing equipment worth $300,000. Assuming a flat rate depreciation of 10% per year, calculate the book value of the equipment after 4 years (define a recurrence relation to answer this question). 7. If the Residential Infrastructure budget is used to purchase specialized machinery costing $800,000 with a unit cost depreciation of $20,000 per year, determine the book value after 3 years (define a recurrence relation to answer this question). The city expects the population in the Residential Infrastructure area to grow exponentially at a rate of 2% per year. a. Calculate the projected population after 10 years if the current population is 50,000 (define a recurrence relation to answer this question). b. Draw a graph illustrating the population growth over 10 years.5-37. Old School is trying to decide whether it should purchase or lease a new high-speed photocopier machine. It will cost the school $14,000 to purchase the copier and $750 each year to maintain the machine over the course of its 6-year useful life. At the end of the sixth year, Old School expects to be able to sell the copier for $1,000. A dealer has offered to lease the school the same copier for a payment of $750 at the beginning of the lease plus lease payments of $3,450 per year for 4 years. Lease payments include all maintenance. The dealer was unable to offer a lease longer than 4 years. Lease payments would be made at the end of each year. If Old School’s discount rate is 8 percent, which alternative should it choose and why?The Culinary Institute is considering a classroom remodeling project. The cost of the remodel would be $350,000 and will be depreciated over six years using the straight- line method. The model will acoomoodate five extra student per year. Additional information related to the project follows:Cost of the remodel project: $350,000 Useful life of project in years: 6 Annual number of extra students: 5 Annual tuition per student: $22,000 Before- tax incremental cost of a student: $2,000 Company's income tax rate: 20% Required rate of return: 12% Assuming a six- year time horizon, what is the internal rate of return of the remodeling project? Calculate using both present value factors and separately using Excel's IRR function. Please include formulas to show how you arrive at each solution! A) Annual cash flow: Revenue ? Less costs:Other than depreciation ? Depreciation ? Income before taxes ? Income tax expense ?…
- In this problem, we consider replacing an existing electrical water heater with an array of solar panels. The net installed investment cost of the panels is $1,400 ($2,000 less a 30% tax credit from the government). Based on an energy audit, the existing water heater uses 200 kilowatt hours (kWh) of electricity per month, so at $0.12 per kWh, the cost of operating the water heater is $24 per month. Assuming the solar panels can save the entire cost of heating water with electricity, answer the following questions: Solve, a. What is the simple payback period for the solar panels? b. What is the IRR of this investment if the solar panels have a life of 10 years?8-18 QZY, Inc. is evaluating new widget machines offered by three companies. The chosen machine will be used for 3 years. Company Company Company A B C First cost $15,000 $25,000 $20,000 Maintenance and operating 1,600 400 900 Annual benefit 8,000 13,000 9,000 Salvage value 3,000 6,000 4,500 (a) Construct a choice table for interest rates from 0% to 100%. (b) MARR = 15%. From which company, if any, should you buy the widget machine? Use rate of return analysis. Only use Excel please3. GuRL Corp. is considering selling its old popcorn machine and replacing it with a newer one. The old machine has a book value of P5,000, and its remaining useful life is five years. Annual costs are P4,000. A high school is willing to buy it for P2,000. New equipment would cost P18,000 with annual operating costs of P1,500. The new machine has an estimated useful life of five years. Should the machine be replaced? Prepare a differential analysis report to support your answer.
- A solar heating system costs $6500 initially and qualifies for a federal tax credit (40% of cost, not to exceed $4000). The cost of money is 10%, and inflation is expected to be 7% during the life of the system. The expected life of the system is 15 years with zero salvage value. The homeowner is in the 40% income tax bracket. The initial (first-year) fuel saving, estimated at $500, is expected to increase in response to inflation. The annual maintenance cost of the system is established at 5% of the annualized cost of the system. What is the time required for the payback condition to be reached for this investment?1.The monthly consumption of electrical energy in Isra University 50000JD. The University installed a solar PV system with a cost of 500000 JD.Calculate the payback period of capital for this investment.Johnny’s Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $47,000 and will be depreciated straight-line over 3 years. It will be sold for scrap metal after 5 years for $11,750. The grill will have no effect on revenues but will save Johnny’s $23,500 in energy expenses. The tax rate is 30%. Required: a. What are the operating cash flows in each year?b. What are the total cash flows in each year?c. Assuming the discount rate is 11%, calculate the net present value (NPV) of the cash flow stream. Should the grill be purchased?