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 best of your ability.
- 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 maximum of $500,000, with no repayment of the funds required. It will take a lawyer to draw up the application, and once approved you will be required to provide quarterly status reports to the government until the project is built, plus a final report and accounting of the grant for the project. - i) What is the cost of capital for this subsidy? (2 points) - j) How would that impact your MARR? (1 point) Bonus question: There is a run-of-river hydro plant 3040km north-west of Squamish, BC. What - 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 maximum of $500,000, with no repayment of the funds required. It will take a lawyer to draw up the application, and once approved you will be required to provide quarterly status reports to the government until the project is built, plus a final report and accounting of the grant for the project. - i) What is the cost of capital for this subsidy? (2 points) - j) How would that impact your MARR? (1 point) Bonus question: There is a run-of-river hydro plant 3040km north-west of Squamish, BC. What
