Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. (5 pts) An electric plant that produces 11 x 109 kWh/year has an annual investment expenditure of $44.5 x 106 /year for an expected

image text in transcribed

5. (5 pts) An electric plant that produces 11 x 109 kWh/year has an annual investment expenditure of $44.5 x 106 /year for an expected project lifetime of 30 years, with no remaining salvage value. The capital cost of the plant is repaid at 5% discount or interest rate. Total annual operating cost at the plant is $21 x 10/year, and annual return to investors at 5% of the operating cost plus capital repayment cost. (a) What is the levelized cost of electricity in $/ Wh? (b) If they charge at this cost and assuming no other cost, estimate when will they reach breakeven point? (c) If they charge at this cost and assuming no other cost, estimate the return on investment, if any? 5. (5 pts) An electric plant that produces 11 x 109 kWh/year has an annual investment expenditure of $44.5 x 106 /year for an expected project lifetime of 30 years, with no remaining salvage value. The capital cost of the plant is repaid at 5% discount or interest rate. Total annual operating cost at the plant is $21 x 10/year, and annual return to investors at 5% of the operating cost plus capital repayment cost. (a) What is the levelized cost of electricity in $/ Wh? (b) If they charge at this cost and assuming no other cost, estimate when will they reach breakeven point? (c) If they charge at this cost and assuming no other cost, estimate the return on investment, if any

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Theory And Practice

Authors: Prasanna Chandra

8th Edition

0071078401, 978-0071078405

More Books

Students also viewed these Finance questions