Green Energy Corp. is analyzing two renewable energy projects. The firm's required return on investments is 14%.
Fantastic news! We've Found the answer you've been seeking!
Question:
Green Energy Corp. is analyzing two renewable energy projects. The firm's required return on investments is 14%.
Year | Solar Project | Wind Project |
0 | $(70,000) | $(85,000) |
1 | $18,000 | $22,000 |
2 | $20,000 | $25,000 |
3 | $25,000 | $28,000 |
4 | $30,000 | $32,000 |
a. Calculate the payback period for both projects. Which project is preferred based on the payback period?
b. Determine the net present value for each project. Which project should be selected based on the net present value?
Expert Answer:
Posted Date:
