I have posted this answer Twice and and Expert has answered it wrong and incomplete twice. PLEASE answer all questions from a) to j) to the best of your ability.

You are an energy company looking to decarbonize small communities that are currently reliant on diesel generators for their electricity. The remote town of Burtonville currently is electrified by a set of diesel generators that are nearing the end of their life. You are preparing a proposal to replace the generators with a cleaner alternative. The town needs generation with a peak power capability of 1 MW. Option 1: Simply replace the generators with new diesel generators - Capital cost: $750,000 - Lifetime of generators: 20 years - Operating costs: - $1,500,000 fuel costs for year 1 , growing at $50,000 per year - $200,000 in maintenance costs per year, growing at $10,000 per year - CO2 Emissions: 3,100 tonnes per year Option 2: Run of river hydro-power, with a diesel generator backup for low flow seasons - Capital cost of hydro generator: $1,500,000 - Capital cost of diesel backup generator: $500,000 - Lifetime of both generators: 50 years - Operating costs: - Maintenance, hydro generator: $100,000 in year 1 , growing 2 percent per year - Fuel, diesel generator: $300,000 in year 1 , growing at $10,000 per year - Maintenance, diesel generator: $20,000 per year, constant - CO2 Emissions: 620 tonnes per year Option 3: Wind turbines with an electrolyser and backup fuel cell generator - Capital cost: $3,800,000 - Lifetime of turbine and fuel cell generator: 25 years - Operating costs: $340,000 in year 1 , growing at 3 percent per year - CO2 Emissions: None Before assessing this project, you evaluated a different electrification projects and found them on average providing a 12% rate of return. Your company went looking for investors and was offered the following two packages from different investors: Financing package 1: A consortium of pension funds offers to fund the project as a spin-off venture. They will provide 80% of the capital cost funding, and expect an 9% annual dividend. The remaining 20% of the project funding will come from internal funds that could be used for other projects. Financing package 2: The project could be funded by a number of bank loans. One bank is offering up to $1,000,000 at 5 percent, a second is offering up to $1,500,000 at 5.5%, and a third will provide up to $5,000,000 at 7%. - a) What is the WACC for each financing package option? (2 points) - b) Which package would you choose to fund the project? (1 point) - c) What is your MARR? (1 point) Evaluate the three potential replacement projects using a worth analysis. Use the MARR you determined above. - d) Given the MARR you determined before, which option would you recommend? ( 3 points) - e) How would changing the financing option change your recommendation? (1 point) The federal carbon tax of $50/ tonne is already built into the operating costs above. The government is proposing to increase the carbon tax linearly to $170 per tonne over the next 12 years. - f) What is the new worth for the Run of River hydro-power option if this tax is implemented? (2 points) - g) Would this change to the carbon tax alter your recommendation? Why? (1 point) Suppose the power authority is offering to pay the power provider for Burtonville $450,000 per year, with a 4 percent increase per year. Suppose your cost of borrowing money is the lowest WACC you determined from the two financing options, and assuming you can invest any profits you make at the MARR you determined above. - h) What is the MIRR of the wind turbine and fuel cell generator option? (3 points) Discuss - no calculations or values needed for the following questions: The federal government is offering a subsidy for CO2 reducing projects like this. They will cover up to 50% of capital costs to a You are an energy company looking to decarbonize small communities that are currently reliant on diesel generators for their electricity. The remote town of Burtonville currently is electrified by a set of diesel generators that are nearing the end of their life. You are preparing a proposal to replace the generators with a cleaner alternative. The town needs generation with a peak power capability of 1 MW. Option 1: Simply replace the generators with new diesel generators - Capital cost: $750,000 - Lifetime of generators: 20 years - Operating costs: - $1,500,000 fuel costs for year 1 , growing at $50,000 per year - $200,000 in maintenance costs per year, growing at $10,000 per year - CO2 Emissions: 3,100 tonnes per year Option 2: Run of river hydro-power, with a diesel generator backup for low flow seasons - Capital cost of hydro generator: $1,500,000 - Capital cost of diesel backup generator: $500,000 - Lifetime of both generators: 50 years - Operating costs: - Maintenance, hydro generator: $100,000 in year 1 , growing 2 percent per year - Fuel, diesel generator: $300,000 in year 1 , growing at $10,000 per year - Maintenance, diesel generator: $20,000 per year, constant - CO2 Emissions: 620 tonnes per year Option 3: Wind turbines with an electrolyser and backup fuel cell generator - Capital cost: $3,800,000 - Lifetime of turbine and fuel cell generator: 25 years - Operating costs: $340,000 in year 1 , growing at 3 percent per year - CO2 Emissions: None Before assessing this project, you evaluated a different electrification projects and found them on average providing a 12% rate of return. Your company went looking for investors and was offered the following two packages from different investors: Financing package 1: A consortium of pension funds offers to fund the project as a spin-off venture. They will provide 80% of the capital cost funding, and expect an 9% annual dividend. The remaining 20% of the project funding will come from internal funds that could be used for other projects. Financing package 2: The project could be funded by a number of bank loans. One bank is offering up to $1,000,000 at 5 percent, a second is offering up to $1,500,000 at 5.5%, and a third will provide up to $5,000,000 at 7%. - a) What is the WACC for each financing package option? (2 points) - b) Which package would you choose to fund the project? (1 point) - c) What is your MARR? (1 point) Evaluate the three potential replacement projects using a worth analysis. Use the MARR you determined above. - d) Given the MARR you determined before, which option would you recommend? ( 3 points) - e) How would changing the financing option change your recommendation? (1 point) The federal carbon tax of $50/ tonne is already built into the operating costs above. The government is proposing to increase the carbon tax linearly to $170 per tonne over the next 12 years. - f) What is the new worth for the Run of River hydro-power option if this tax is implemented? (2 points) - g) Would this change to the carbon tax alter your recommendation? Why? (1 point) Suppose the power authority is offering to pay the power provider for Burtonville $450,000 per year, with a 4 percent increase per year. Suppose your cost of borrowing money is the lowest WACC you determined from the two financing options, and assuming you can invest any profits you make at the MARR you determined above. - h) What is the MIRR of the wind turbine and fuel cell generator option? (3 points) Discuss - no calculations or values needed for the following questions: The federal government is offering a subsidy for CO2 reducing projects like this. They will cover up to 50% of capital costs to a