g6 A proposed steel mill mill may include a co-generation trical plant. This plant will add $2.3M in first st with net annual savings of $0.27M considering operating costs and electrical bills. The plant will ave a $0.4M salvage value after 25 years. The firm ses an interest rate of 12% and present worth index PWI) in its decision making. The public utility offers a subsidy for co- eration facilities because it will not have to invest as much in new capacity. This subsidy is calculated s 20% of the co-generation facility's first cost, but it is paid annually. The utility calculates the sub- sidy using a benefit-cost ratio at 8% and a life of 20 years. (a) Is the plant economically justifiable to the firm without the subsidy? What is the PWI? (b) What is the annual subsidy? (c) Is the plant economically justifiable to the firm (d) How important is the difference in interest rates, (e) How important is the difference in horizons, and with the subsidy? Now what is the PWI? and how does it affect these results? how does it affect these results? What is the "co" aspect of a co-generation power plant? What are the primary benefits of this g6 A proposed steel mill mill may include a co-generation trical plant. This plant will add $2.3M in first st with net annual savings of $0.27M considering operating costs and electrical bills. The plant will ave a $0.4M salvage value after 25 years. The firm ses an interest rate of 12% and present worth index PWI) in its decision making. The public utility offers a subsidy for co- eration facilities because it will not have to invest as much in new capacity. This subsidy is calculated s 20% of the co-generation facility's first cost, but it is paid annually. The utility calculates the sub- sidy using a benefit-cost ratio at 8% and a life of 20 years. (a) Is the plant economically justifiable to the firm without the subsidy? What is the PWI? (b) What is the annual subsidy? (c) Is the plant economically justifiable to the firm (d) How important is the difference in interest rates, (e) How important is the difference in horizons, and with the subsidy? Now what is the PWI? and how does it affect these results? how does it affect these results? What is the "co" aspect of a co-generation power plant? What are the primary benefits of this