Initial Investment: $640 000 000

A stream turbine and LNG turbine are expected to be operational in 2002. In 2006, a second LNG turbine is expected to come in line. The third LNG turbine is expected to be operational in 2008.

The LNG turbines each produce 220 MW and the stream turbine 180 MW of electity.

Construction costs are projected at $550 per installed kWh

Construction costs also include: $80 million for the terminal facility , $72 million for storage facility and $35 mil for the transmission line upgrade

LNG will be delivered at NYMEX natural spot prices.

No taxes

Required rate of return : 4,49%

What is the NPV of this project? What is the annual cash flow for this project? Please help

Exhibit 6: Electricity Prices and Demand Levels Production NYMEX LNG Production Demand for 30% Spot Prices $/kWh Demand for 70% (after yr 10) $0.00 0.050 100% 100% $3.50 0.050 100% 100% $4.00 0.050 100% 100% $4.50 0.055 100% 100% $5.00 0.060 100% 80% $5.50 0.065 100% 80% $6.00 0.072 100% 80% $6.50 0.078 90% 75% $7.00 0.084 80% 75% $7.50 0.090 70% 75% $8.00 0.090 65% 65% Exhibit 6: Electricity Prices and Demand Levels Production NYMEX LNG Production Demand for 30% Spot Prices $/kWh Demand for 70% (after yr 10) $0.00 0.050 100% 100% $3.50 0.050 100% 100% $4.00 0.050 100% 100% $4.50 0.055 100% 100% $5.00 0.060 100% 80% $5.50 0.065 100% 80% $6.00 0.072 100% 80% $6.50 0.078 90% 75% $7.00 0.084 80% 75% $7.50 0.090 70% 75% $8.00 0.090 65% 65%