Question
Imagine that the Puerto Rico Electric Power Authority (PREPA) has committed to building a solar power plant as part of strategies to reduce the island's
Imagine that the Puerto Rico Electric Power Authority (PREPA) has committed to building a solar power plant as part of strategies to reduce the island's long-term dependence on oil for electricity generation. You and your group have been identified as the professionals prepared to carry out the analysis of feasible alternatives. You have already made the initial effort and have identified three possible designs for the solar power plant. In addition, PREPA has informed them that they use a MARR of 10% after contributions to evaluate capital investment alternatives and that this project must be evaluated for 20 years. It's up to you to do the detailed analysis and provide your recommendations. The information available on the three identified alternatives is summarized below.
1) Flat Solar Panel Design
-A field of flat solar panels installed at the correct angle to receive the sun would produce 2.6 megawatts of power. This would cost around $85 million initially and would have operating costs of $2 million the first year and these would increase by $200 thousand annually.
-This option will produce electricity with a value of $7 million the first year that would increase by 8% per year from the second year
Please, show the flow chart, the desicion criteria and equivalence models to use. Thanks in advance.
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