A company wants to build a new 700 MW natural gas power plant. The capital cost of the plant is $1.5 billion. The project is financed using 75% debt and 25% equity. The companys interest rate on debt is 5%.

Annual Payment= 7.92

Fixed annual expenses= 7.965

Total annual cost= 11.165

Assume that the plant is built during year 0, and that in that year the plants only cost is equal to the shareholder equity paid by the company for construction. No other costs occur in year 0. The plant does not sell electricity in year 0, only years 1-25. Then, starting in year 1 and going all the way to year 25 (the final year of the plants life), the plant is operational and experiences total annual costs equal to your calculation in question #3, and revenues specified below. The projects discount rate is assumed to 8%

1. , show the projects total annual costs, using each row as a different year (0-25).
2. In a separate column, keep track of annual revenues for the plant. Assume that the plant expects to earn $150 million per year selling electricity in years 1-25 (no electricity is sold in year 0 when the plant is being built).
3. In another column, calculate annual profits (revenues minus costs).
4. Then create a final column that discounts annual profits using the discount rate listed (8%).
5. Plot discounted net cashflows (profits) in Excel from years 0-25, and include this plot here.