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A B E 1 Production Plant Cash Flows Year Natural Gas Plant Cash Flows Nuclear Plant Cash Flows (In Wind Plant Cash Flows (In. Solar Plant Cash Flows (In Coal Plant Cash Flows (In Millions N In Millions S Millions S Millions S Millions S S) -650 5500 -15 -300 1800 0 0 0 0 0 2 0 0 0 42.5 0 0 4 85 0 3 97 5 85 680 97 6 85 680 97 10 85 580 8 650 9 680 10 680 11 680 12 680 13 680 14 580 15 680 16 580 20 17 680 21 18 680 22 19 680 23 20 680 24 21 680 25 22 680 26 23 680 27 24 180 28 25 680 29 26 680 30 27 580 31 28 680 32 29 680 33 30 680 D D D D O O O O O N N N N N N N N N N N N N N N N N N 19 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 34 35 WACC MUST ENTER Cost of Capital for NPV computations in spreadsheet below to calculate 36 37 =NPV(B35,B4:B33)+B3 38 NPV $837.50 $12,150.00 $23.00 $243.00) $819.00 39 IRR 7.99% 7.83% 10.18% -12.12% 2.33% 40 41 42 43Useful Life Plant Type (Years) Expected Annual Cash Flows Cost (In Millions $) Natural Gas (In Millions $) 20 650 85 Nuclear 30 5500 Wind 680 20 15 2 Solar 20 300 3 Coal 30 1800 97Address the important question of what mix of projects should be pursued? Explain why. Keep in mind that the total long-term debt funding available to TVA is $30 billion and the current level is almost $9 billion. Also note that the needed additional power generation from new construction is 2,835 MW. Plant Type NPV IRR Power Production Natural Gas 354.02 7.99% 720 Nuclear 4426.11 7.83% 2000 Wind 11.39 10.18% 150 Solar -260.41 -12.12% 100 Coal -296.43 2.33% 2300#2- Assignment- Case 3 Written Memo plus Excel Appendices Individually prepare a memo including appropriate appendices that well addresses the following: You are not just answering the following questions Evaluate the five alternative production projects using traditional discounted cash flow analysis: a) What is the appropriate cost of capital for this case? Support your reasoning. Note that the marginal cost of capital is the appropriate input for capital budgeting decisions. This rate should best estimate of the current cost of raising additional debt of similar risk