Question
A company wants to build an electric power station with 5MW power powered by natural gas. The cost to build the central is 10 million
A company wants to build an electric power station with 5MW power powered by natural gas. The cost to build the central is 10 million TL. This station will produce 50x10^6 kWh energy the first year and this will decrease 3% annually. The elelctricity produced will be sold 250 TL/MWh and electric price escalation is %18 yearly. To produce 1kWh electricity, 0.2 m^3 natural gas will be consumed. Price of natural gas is 1.1 TL/m^3 and escalating annually %17. Other expenses are: constant expenses for the company is 50TL/ kW-year and variable expenses is 0.01 TL/kWh and both of them will increase 17% monthly. Discount amount is 24% annually and the economic life is 25 years.
a) Draw the cash flow diagram
b) Calculate if this investment is economically viable by using future worth method
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