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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
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 Lond (Eoyo) Green Diesel $1.900,000 $3.800,000 Facility Construction (Eoyl) $5,300,000 $7,100,000 Annual O and E (E0y4) 1$2,450,000 |$2,800,000 Raw 1$ 1.500.000 $250,000 Materials (Eoyu) Salvage valve (E0413) 1$3,000,000 $3,600,000
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