A power plant that supplies a community with electricity costs $1 billion to build, lasts 25 years,

and has an annual operating cost of $0.2 billion; it costs $0.1 billion to decommission the plant at

the end of its lifetime (25 years). (Assume that the construction costs and the operating costs

are paid at the beginning of the period, and that the decommissioning cost is paid at the end of

the life of the plant.) The annual discount rate is r, with discount factor = 1

1+r . Write the

formula for the present value of the cost of providing this community with electricity for 100 years,

including the decommissioning costs. (Hint: First nd the present value of providing one unit of

electricity for 25 years. Denote this magnitude as Z. Then nd the present value of incurring

this cost, Z, 4 times: in periods 0, 25, 50, and 75.)