A university spent $2 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 30%, 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?

A. 30,156.82

B. 45,235.23

C 15,078.41

D. 27,141.14

If the solar panels can operate only for 27,141 hours a year at maximum, the project(would or would not) break even.

Continue to assume that the solar panels can operate only for 27,141 hours a year at maximum.

In order for the project to be worthwhile (i.e., at least break even), the university would need a grant of at least

A. $180,007

B. $200,008

C. $260,011

D. $100,004