Use AW (annual worth) and ROR (rate of return) analysis to solve the problem. Use EXCEL to display all of your formulas and provide detailed explanations. Question: (NPB) has negotiated a 10-year contract with an oil company to sell 150,000 barrels of ethanol per year beginning at the end of the fiscal year (EOY) 4. The oil company will pay NPB $10 million per year from EOYO to EOY3, and then $110 per barrel. 1) Which method should be used to produce biofuels if the NPB uses a 15% interest rate? Annual O&E costs rise by 2% per year, while raw material costs rise by 3% per year.

Biodiesel Purchase of Land (Eoyo) Green Diesel $3,800,000 $1,900,000 Facility construction (Eoxl) $5,300,000 $7,100,000 Annual 0 and E (E014) $2,450,000 $2,800,000 Raw $1. 1,500,000 Materials (E014) Salvage valve (E0413) ( $250,000 $3,000,000 $3,6001000 $ Biodiesel Purchase of Land (Eoyo) Green Diesel $3,800,000 $1,900,000 Facility construction (Eoxl) $5,300,000 $7,100,000 Annual 0 and E (E014) $2,450,000 $2,800,000 Raw $1. 1,500,000 Materials (E014) Salvage valve (E0413) ( $250,000 $3,000,000 $3,6001000 $