Annual cash flows of solar energy system

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Reference no: EM13881979

Tabulate the annual cash flows of a solar energy system that has an initial cost of $7,000 for a 12-year analysis. Also estimate the life cycle savings and the internal rate of return. The following economic parameters apply:

Down payment = 20%.

Interest rate = 9%.

First-year fuel saving = $1, 250.

Market discount rate = 8%.

Fuel inflation rate = 7%.

Maintenance and parasitic cost = 0.5% increasing at 1% per year.

Resale value = 25%.

Reference no: EM13881979

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