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7.4 In an effort to meet its obligation under the Kyoto agreement, the government of Syldavia has decided to encourage the construction of renewable generation

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7.4 In an effort to meet its obligation under the Kyoto agreement, the government of Syldavia has decided to encourage the construction of renewable generation by guaranteeing to buy their output at a fixed price of 35 $/MWh. Greener Syldavia Power Company is considering taking advantage of this program by building a 200 MW wind farm. T cost amounts to 850 $/kW. Based on an analysis of the wind regime at the proposed location, the engineers of Greener Syldavia Power Company estimate that the output of the plant will be as shown in the table below: his wind farm has an expected life of 30 years and its building Output as a fraction of capacity (96) Hours per year 1700 1200 850 400 4610 100 75 50 25 0 Given that the Greener Syldavia Power Company has set itselfan MARR of 12%, should it take the government's offer and build this wind farm? 7.4 In an effort to meet its obligation under the Kyoto agreement, the government of Syldavia has decided to encourage the construction of renewable generation by guaranteeing to buy their output at a fixed price of 35 $/MWh. Greener Syldavia Power Company is considering taking advantage of this program by building a 200 MW wind farm. T cost amounts to 850 $/kW. Based on an analysis of the wind regime at the proposed location, the engineers of Greener Syldavia Power Company estimate that the output of the plant will be as shown in the table below: his wind farm has an expected life of 30 years and its building Output as a fraction of capacity (96) Hours per year 1700 1200 850 400 4610 100 75 50 25 0 Given that the Greener Syldavia Power Company has set itselfan MARR of 12%, should it take the government's offer and build this wind farm

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