Anticipated capacity factor selling power will not escalate

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Reference no: EM1321855

Q. . A power plant has a nominal construction cost of $1,000 every kWe also a construction period of 9 years. Payments for the construction are made monthly also escalate at 6 percent every year. The anticipated capacity factor is 70 percent also the price for selling power will not escalate.

The discount rate on construction funds also power payments is 9% APR, compounded daily. The operational life of the plant is 40 years also the salvage value negligible.

(a) Conclude the future value/kWh at the end of construction.

(b) Conclude the future value/kWh at the end of life.

Reference no: EM1321855

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