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Valley Power Company uses natural gas to create steam to spin turbines to generate electricity. The costs of the power plant, including depreciation, taxes, and

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Valley Power Company uses natural gas to create steam to spin turbines to generate electricity. The costs of the power plant, including depreciation, taxes, and insurance, are fixed to generating electricity. The costs of operating personnel, maintenance, and fuel are variable to generating electricity. The fixed and variable costs are expressed in terms of costs per megawatt hour. A megawatt is 1 million watts generated per hour. A kilowatt is one thousand watts generated per hour. The fixed and variable costs per megawatt hour for Valley Power Company are: 1. Determine the operating income per megawatt hour for industrial customers. 2. Determine the contribution margin per megawatt hour for industrial customers. 3. What is the lowest price per kilowatt-hour that Valley Power could offer for offpeak power and maintain a positive contribution margin? 4. What are some other implications in offering a discounted off-peak price to the new customer

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