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The province of Ontario is planning to build a new wind farm at Niagara region. The construction of the wind farm will start by the

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The province of Ontario is planning to build a new wind farm at Niagara region. The construction of the wind farm will start by the beginning of 2022 and will take 3 years at a cost of $200 million per year. The cost of maintenance and repairs, which is to start after project completion, is expected to be $5 million for the first 6 years, and to increase by $50,000 per year thereafter. The scrap value of the wind farm (mainly metal parts of the wind turbines) is estimated to be $25 million at the end of its service life. The project is expected to save the province $55 million per year in energy savings. Assuming the present to be the end of 2016/beginning of 2017, the life of the project is till the end of year 2059, and the interest rate to be 5%, a) Draw a cash flow diagram for this project (from present till 2059). (7 Marks) b) What is the Present Worth of the project? (8 Marks) c) What is the Future Worth of the project? (7 Marks) d) Is it a good investment for the province to make? (3 Marks

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