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WindFarm Nevada is considering the purchase of wind turbines at a cost of $100 million as of 1/1/ 2019. The company expects the wind turbines

WindFarm Nevada is considering the purchase of wind turbines at a cost of $100 million as of 1/1/ 2019. The company expects the wind turbines to operate at an average capacity of 70 megawatts (mW) per hour (i.e. it produces 70 mW-hour of electricity every hour). The current price of electricity is $50 per mW-hour and WindFarm Nevada thinks that this price will be stable for the next few years. Maintenance costs are $10 million per year. All costs and revenues occur at the end of the year.

Suppose the wind turbines will last 5 years, and the turbines must be depreciated straight line over these 5 years. There is no salvage value and the forgone rental value of the land is negligible. Profits are taxed at 30% and WindFarm Nevadas cost of capital is 10%. There are 8,760 hours in a year.

What is the project's NPV?

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