Alternative Three

After discussions with the owners, you decide to test the feasibility of another alternative course:

Perform an upgrade to the energy consuming equipment at a cost of $$100,000($CAPEX$).$

Because of the installation of the energy saving equipment, you expect that the operating expenses will

only increase by $1\%$ annually instead of the $2\%$ originally projected. GPI in this case is projected to

increase by the original $5\%$ per year.

What is the midstream current equity?

What is midstream current market value?

What are the before$-$tax cash flows for the next five years?

What are the net sales proceeds at the end of the holding period?

Perform the Four Tests of Investment Return.

$\frac{\text{\$}}{\text{\$}}\%$ :

Value Enh:

NPV:

IRR: