7 We have the following data for a power plant: 1 MW CENTRAL ECONOMIC BALANCE Power: 1...
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Question:
7
We have the following data for a power plant:
1 MW CENTRAL ECONOMIC BALANCE
Power: 1 Mwa
Maintenance cost: 3% per year
Initial cost of operation: 5% per year
Regulated Rate: $0.015/kWh (20 years)
Project cost = $750,000.00
Plant factor= 60%
Energy: 5256000 KWh
Income from regulated tariff: 78840
Annual revenue increase: 6%
Initial maintenance cost/year of annual maintenance (2% installation): $ 22,500.00
Annual maintenance increase: 5%
Initial cost of operation/year (1% Installation) $ 37,500.00
Annual operation increase: 3%
It is assumed that in year 10, an equipment update will be carried out whose cost will be 25% of the value of the investment = $187,500.00
SOLVE: Find the IRR for 10 years.
Select one:
a. -3%
b. 20%
c. -20%
d. -8%
e. 8%
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