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Planning is in progress for construction of a solar power plant to produce electricity for residents in a town in central Australia. The target IRR
Planning is in progress for construction of a solar power plant to produce electricity for residents in a town in central Australia. The target IRR of this project is 14%. The cost and benefits for this project is summarized in the table below: The land price to install the solar panels Renewable energy facilities Installation cost $400,000 $5,500,000 $2,000,000 $20,000 2,000,000 kWh $X per kWh Maintenance cost per year Electricity production every year Fixed electricity price during 50 years Service life End of life value 60 years $1,000,000 Based on the above information, please calculate how much the fixed electricity price per kWh should be to reach IRR equal to 14%
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