Question 1 (20 points): Develop a pro forma set of income and cash flow statements for a wind energy plant with the following parameters, and calculate the plant's NPV, IRR and LCOE: Overnight capital costs are $1.2 million, all incurred in Year O. There is no land acquisition cost assumed here. The plant has a salvage value of $200,000 at the end of the plant's life Annual revenues from spot market sales are $400,000. Annual operating costs are $30,000. . The plant qualifies for the same 3-Year MACRS schedule that we used in class. The plant faces a 34% tax rate There are no accounts payable or receivable, but the plant is assumed to have a cash net working capital requirement of $300,000, beginning in The lifetime of the plant is 5 years The plant qualifies for a production subsidy of $200,000 per year for all operating years. A hint here is to model this production subsidy as a Year O. This working capital can be liquidated at the end of the final year of operation. . The discount rate is 20% revenue source The plant produces 10,000 Megawatt-Hours (MWh) of electricity in each year, Years 1 through 5. (You'll need this to calculate LCOE.) Question 2 (20 points): Develop a pro forma set of income and cash flow statements for the same wind plant as in Question 2, but this time assume that the plant receives a one-time cash subsidy of $400,000 in Year O to offset some of the construction cost rather than the annual subsidy. How does this change the NPV of the plant? If you were the plant developer, which type of subsidy would you prefer? Note that you need only compare the NPV between this scenario and the scenario in Question 1, not the IRR or LCOE. In Question 2, you can assume that the capital cost subsidy is not taxable- in other words, you can model the subsidy as a $400,000 reduction in the capital cost of the plant