With the information provided:

How do you calculate the salvage value?

The company will purchase $90 million worth of turbine equipment. They will cost an additional $25 million to install and $10 million for training. The total capacity of the turbines is 350 megawatts (mW) produced for each hour of operation, but the company only expects to operate at 35% capacity in the first year as a base case assumption. In the best case scenario, it expects 38% and in the worst case 32%. (Assume a 365-day year so that capacity in hours is 365 * 24 = 8,760 hours.) After that, capacity is projected to grow at 1.5% annually in the base case. For the best and worst case scenarios, use 1.7% and 1.3%, respectively.

Electricity can be sold at $45 per megawatt hour (mWh) (best case $48, worst case $41) with associated costs of $10 per mWh (best case $9, worth case $13). Maintenance and fixed costs will average $17.5 million in the first year of operations. Inflation, which affects price and all costs, should be assumed to be 2%. NWC needs are 2% of the next years revenue.

The equipment can be depreciated using 20-year straightline depreciation, but the company believes that due to competition and inflation the equipment will still be worth $125 million at the end of the 5 years. The appropriate tax rate is 25%, and WACC is 9.5%.