Calculate the NPV of the following proposed project

Amount Notes 3 Turbine Information 4 Number of turbines 5 Maximum capacity output per turbine 6 Height of turbine tower 7 Disk radius 8 Turbine efficiency coefficient 9 Average hourly power output per turbine 10 Operational days per year 11 Capital expenditure per turbine 12 Life 13 Salvage per turbine 14 Expected price per MWh of power in first year Units 5.00 1.70 MW 80.00 m 50.00 m 0.80 0.31 MW 363.00 days 3,000,000.00 $ 20.00 years 200,000.00 $ 80.00 $ This is effectively the length of a turbine blade. Used in determining turbines ability to turn wind into power Calculated from wind data in 'Wind Analysis' tab Twice a year, turbine is stopped for maintenance. Turbines will be dismantled at end of 20 years if not overhauling. Market value at end of 20 years. Price per MWh is then expected to increase at inflation. For each MWh generated by the wind turbines, SAI will be issued with a renewable energy certificate which it can sell to electricity retailers who have sold renewable energy to customers. Price of certificates then expected to increase at inflation. Annual operating expenses then expected to increase by inflation. 15 Expected price per MWh of renewable energy certificate in first year 16 Expected operating expenses per turbine in first year 17 Depreciation method 18 Working capital 19 Inflation Rate (p.a.) 20 Tax Rate 21 Discount Rate 70.00 $ 100,000.00 $ Straight Line $ 0.026 0.30 0.11 Given service agreements, there is no working capital requirement Tax payment occurs at the same year as income This is the minimum constant annual subsidy (years 1 - 20 and rounded to nearest $10,000 amount) to ensure investment generates required rate of return. Note that the subsidy is taxable. 22 Subsidy (20 years) 1,600,000.00 $ 20.00 years Additional Information to extend life to 40 years Overhaul cost at end of 20th year per turbine Life of overhaul Salvage Depreciation method of overhaul cost Treatment of existing capital expenditure (e.g. original outlay) $ Straight Line $ Overhaul expense is capitalised and then depreciated over extended life. Remaining book value of original capital expenditure written down to zero in year 20. This is the minimum constant annual subsidy (years 1-40 and rounded to nearest $10,000 amount) to ensure investment generates required rate of return. Note that the subsidy is taxable. Subsidy (40 years) Amount Notes 3 Turbine Information 4 Number of turbines 5 Maximum capacity output per turbine 6 Height of turbine tower 7 Disk radius 8 Turbine efficiency coefficient 9 Average hourly power output per turbine 10 Operational days per year 11 Capital expenditure per turbine 12 Life 13 Salvage per turbine 14 Expected price per MWh of power in first year Units 5.00 1.70 MW 80.00 m 50.00 m 0.80 0.31 MW 363.00 days 3,000,000.00 $ 20.00 years 200,000.00 $ 80.00 $ This is effectively the length of a turbine blade. Used in determining turbines ability to turn wind into power Calculated from wind data in 'Wind Analysis' tab Twice a year, turbine is stopped for maintenance. Turbines will be dismantled at end of 20 years if not overhauling. Market value at end of 20 years. Price per MWh is then expected to increase at inflation. For each MWh generated by the wind turbines, SAI will be issued with a renewable energy certificate which it can sell to electricity retailers who have sold renewable energy to customers. Price of certificates then expected to increase at inflation. Annual operating expenses then expected to increase by inflation. 15 Expected price per MWh of renewable energy certificate in first year 16 Expected operating expenses per turbine in first year 17 Depreciation method 18 Working capital 19 Inflation Rate (p.a.) 20 Tax Rate 21 Discount Rate 70.00 $ 100,000.00 $ Straight Line $ 0.026 0.30 0.11 Given service agreements, there is no working capital requirement Tax payment occurs at the same year as income This is the minimum constant annual subsidy (years 1 - 20 and rounded to nearest $10,000 amount) to ensure investment generates required rate of return. Note that the subsidy is taxable. 22 Subsidy (20 years) 1,600,000.00 $ 20.00 years Additional Information to extend life to 40 years Overhaul cost at end of 20th year per turbine Life of overhaul Salvage Depreciation method of overhaul cost Treatment of existing capital expenditure (e.g. original outlay) $ Straight Line $ Overhaul expense is capitalised and then depreciated over extended life. Remaining book value of original capital expenditure written down to zero in year 20. This is the minimum constant annual subsidy (years 1-40 and rounded to nearest $10,000 amount) to ensure investment generates required rate of return. Note that the subsidy is taxable. Subsidy (40 years)