Your company is planning to construct a gas fired power plant in the Philadelphia area. They are considering one of the two following options, a Rolls Royce simple cycle gas turbine generator and a General Electric combined cycle gas turbine / steam turbine generator. Each power plantwill produce power after construction for a 30-year period. Details on the power plant costs,capabilities,and efficiencies are included in the table below. The price of natural gas in the future is uncertain. Compare these options in terms of NPV and IRR over the range of possible gas prices. Consider 40% of tax and straight line depreciation for the life time of the plant (starting from year 1). Assume a discount rate for your company of 10%

A) Draw the NPV and IRR of a project for fuel cost

B) Find the fuel cost that makes you be indifferent between two projects.

Table of Power Plant Financial and Operating Expenses Rolls Royce Simple Cvcle Generator General Electri Combined Cycle Generator Parameter Initial Capital Expenditure [S Annual Maintenance (Fixed) [S/yr Annual Maintenance (Variable) [S/MWh] Fuel Cost [SMMBtu] Fuel Efficiency $450,000,000 $8,250,000 $4.20 $2.50 $8.00 2.1 0.22 S375,000,000 S8,600,000 S3.60 S2.50 - S8.00 2.7 0.26 1,600,000 $85.00 MMBtu/MWh] Emissions Permits S/MWh] Power Generated Per 1,700,000 Year [MWhlyr] Revenue Per Unit of $85.00 Electricity (S/MWh) MMBtu is millions of Btu 's