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Solve the question by excel pls. Beta Electric Power Co. (BEP) asks you to evaluate the projected development of a power plant. There are six
Solve the question by excel pls.
Beta Electric Power Co. (BEP) asks you to evaluate the projected development of a power plant. There are six alternatives: coal, gas, hydro, nuclear, solar, and wind. The after-tax net cash flows (i.e., free cash flow) for each plant project are estimated respectively as shown in the end of this problem case. BEP has been experienced in operating all those six types of power plants, so the risk for each alternative is about the same as the firm's average risk level. BEP's average WACC is 7.50% annually. (All FCFs and WACC amounts are in real terms, already deflated.) BEP has a time constraint policy that requires full initial investment paid back within 5 years, and all six power projects are considered "repeatable (i.e., renewable)" instead of "one-time deal. Questions: A. If these six power plant projects are independent (for example, to be built across different regions), which one(s) of them shall BEP undertake? (Apply all appropriate major decision rules we have practiced in this course.) B. If these six power plant projects are mutually exclusive (for example, to be built for one single region only), which one(s) of them shall BEP undertake? (Apply all appropriate major decision rules we have practiced in this course.) 400 The free cash flow schedules for all six power plant alternatives are given as: $ Coal Gas Hydro Nuclear Solar Wind millions FCFO -800 -1, 480 |-1,000 1-3, 000 |-1, 700 -1, 700 FCF1 400 400 -100 525 600 700 FCF2 300 -80 525 700 700 FCF3 400 -50 525 800 700 FCF4 150 300 400 525 FCF5 100 300 400 525 FCF6 300 400 525 FCF7 400 525 FCF8 400 525 FCF9 400 525 FCF10 -200 200Step by Step Solution
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