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For the two plans given in Problem 1, a. Take a 5% discount rate. Compare the annual (levelized) cost for both plans. Which plan is
For the two plans given in Problem 1, a. Take a 5% discount rate. Compare the annual (levelized) cost for both plans. Which plan is cheaper? b. Perform a sensitivity analysis to study the sensitivity of the levelized cost of each plan to the value of interest rate. Consider an interest rate ranging from 0% to 20%. To do this, you need to do the following 1. Find the levelized cost of plan A if the interest rate is 0%. Call this (LCAi=0%). Then, find (LCAi=1%),(LCAi=2%),,(LCAi=20%). Plot LCA vs. i. Call this Figure 2. 2. Find the levelized cost of plan B if the interest rate is 0%. Call this (LCBi=0%). Then, find (LCBi=1%),(LCBi=2%),,(LCBi=20%). Plot LCB vs. I on Figure 2. c. Compare Figure 2 to Figure 1. Record your observation
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