Question
Suppose that a company has hired a solar consultant who says that current conditions have changed. According to the consultant, the inflation rate (growth rate)
Suppose that a company has hired a solar consultant who says that current conditions have changed. According to the consultant, the inflation rate (growth rate) for maintenance and upgrades should actually be 5% (instead of 3%) and the PPA price growth rate should be only 2% (instead of 4%). In addition, 15-year PPAs are less common now and most utilities will only sign up for a 10-year PPA so the project forecast should end at project period 10.
1. How would this change your calculations of NPV, IRR, Profitability Index and Payback Period?
2. Would this change your recommendations to the Coopers and if so, in what way?
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PI Warehouse Solar ProjectStep by Step Solution
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