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Conduct a benefit-cost analysis of the project using 3.125 as a measure of the benefits that the project provides and which considers the following costs

Conduct a benefit-cost analysis of the project using "3.125" as a measure of the benefits that the project provides and which considers the following costs (all in millions of US$); and assumes that the project has an operating life of 30 years:

Capital costs (land purchase, construction, machinery, etc.), the power station will take 5 years to build with power generation starting in Year 6;

Year 1 2 3 4 5 6 7 8 9 10
Capital cost 3.2 310 375 450 185 2.3 2.3 2.3 2.3 2.3

Operating costs US$27.5 million p.a. beginning in Year 6;

Fuel costs assume that a tonne of coal has a price of $72 and that the station will consume 5,000,000 tonnes of coal p.a.;

Use a discount rate of 6%.

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