Answered step by step
Verified Expert Solution
Question
1 Approved Answer
3. A nuclear power plant capable of generating a rated output of 2,000 MWe costs $13,000,000,000 (13 billion dollars.) Assuming no inflation, a capacity factor
3. A nuclear power plant capable of generating a rated output of 2,000 MWe costs $13,000,000,000 (13 billion dollars.) Assuming no inflation, a capacity factor of 90%, 8766 hours per year, a cost of operation (fuel, labor, everything) of $0.0015 per MJ of electric energy generated, and an electric sales price of $0.09 per kW-hr, determine if the company can meet a minimum internal rate of return of 15% for a 30 year investment. Hint: calculate an equivalent annual revenue (A) assuming the $13 billion were invested at 15%. Then compare that to the annual profit (electric sales - cost of operation). If the annual profit is more than A, then you are getting more than 15% return on investment. 3. A nuclear power plant capable of generating a rated output of 2,000 MWe costs $13,000,000,000 (13 billion dollars.) Assuming no inflation, a capacity factor of 90%, 8766 hours per year, a cost of operation (fuel, labor, everything) of $0.0015 per MJ of electric energy generated, and an electric sales price of $0.09 per kW-hr, determine if the company can meet a minimum internal rate of return of 15% for a 30 year investment. Hint: calculate an equivalent annual revenue (A) assuming the $13 billion were invested at 15%. Then compare that to the annual profit (electric sales - cost of operation). If the annual profit is more than A, then you are getting more than 15% return on investment
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started