A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 200 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 10%, that electricity can be purchased at $0.10 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero.

Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first.

Approximately how many hoursper yearwill the solar panels need to operate to enable this project to break even?

Approximately how many hoursper yearwill the solar panels need to operate to enable this project to break even?

a.9,925.41

b. 3,817.47

c. 7,634.93

d. 6,107.94