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The table below summarises the financial information for construction of a solar power plant in Western Australia (Plan A). Electricity production per year 2,000,000kWh Alternatively,
The table below summarises the financial information for construction of a solar power plant in Western Australia (Plan A). Electricity production per year 2,000,000kWh Alternatively, we can use higher quality panels and equipment to increase annual electricity production (Plan B). This increases the cost of panels and equipment to $8,000,000. The annual maintenance costs are also going to be decreased to $70,000. All of the other parameters remain unchanged. What is the minimum annual electricity production which results in the same benefit to cost ratio for the two plans? Assume an interest rate of 10%
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