Calculate and tabulate the annual cash flows associated with a solar system for a 10 year period of analysis if the initial solar cost is \(\$ 6000\) and if Interest rate \(=9 \%\)

Power cost \(=\$ 30 /\) year escalating at \(10 \% /\) year Property tax \(=0\)

Income tax bracket \(=32 \%\)

Maintenance \(=0.5 \%\) of the capital per year (escalating at 10\%/year)

Scrap value \(=50 \%\) of initial cost If the solar system saves \(\$ 550 /\) year in conventional fuel (escalating at \(10 \% /\) year), is it cost-effective? Work the problem in current dollars.
Compute the annual payment of a self-amortizing loan for the solar system with the characteristics tabulated as follows:

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Factor Expected system lifetime t (year) Effective interest rate (%) Collector area A, (m) Collector cost ($/m) Storage cost ($/m) Specification 20 8 20 20 100 6.25 Cost of control system ($) Miscellaneous costs (e.g., pipes, pumps, motors, heat exchangers) ($) 100 200+ (5A)