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Consider the current economic situation of the Puerto Rico Electric Power Authority (PREPA). They are at a time where identifying projects to reduce costs in
Consider the current economic situation of the Puerto Rico Electric Power Authority (PREPA). They are at a time where identifying projects to reduce costs in the long term is vital. Let's imagine that PREPA wishes to evaluate the possibility of building a solar power plant as part of the strategies to reduce the long-term dependence on oil in the generation of electrical energy on the island. You have been identified as a professional prepared to do the analysis of feasible alternatives. You have already made the initial effort and have identified three possible designs for the solar power plant. Also. They have been informed by PREPA that they use a MARR of 10% after contributions to evaluate capital investment alternatives and that this project needs to be evaluated for 20 years. It is up to you to make the detailed analysis and provide your recommendations. The information on one of the three identified alternatives is summarized below. A field of mechanized solar panels rotates from side to side so that the panels are parallel to the sun's rays maximizing electricity production. This design would have an output of 3.1 megawatts of power. This would cost about $105 million initially and would have operating costs in the first year of $2 million and these would increase by $100 thousand annually. This option will produce energy with a value of $9.5 million the first year that would increase by 7% annually from the second year. Make a Flowchart of the alternatives to be evaluated If you understand that relevant data is missing to carry out the analysis, you must use a reliable source of information For the analysis to be complete, you must consider payment of income taxes, inflation and replacement It is recommended that the analysis considering inflation be done in real dollars and in current dollars and justify which one to use to make decisions. You must justify the percentage of inflation that you are going to use
A field of mechanized solar panels rotates from side to side so that the panels are parallel to the sun's rays maximizing electricity production. This design would have an output of 3.1 megawatts of power. This would cost about $105 million initially and would have operating costs in the first year of $2 million and these would increase by $100 thousand annually. This option will produce energy with a value of $9.5 million the first year that would increase by 7% annually from the second year.
Make a Flowchart of the alternatives to be evaluated
If you understand that relevant data is missing to carry out the analysis, you must use a reliable source of information For the analysis to be complete, you must consider payment of income taxes, inflation and replacement
It is recommended that the analysis considering inflation be done in real dollars and in current dollars and justify which one to use to make decisions. You must justify the percentage of inflation that you are going to use
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