Calculate the net present value of the investment

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Reference no: EM132057146

A wind turbine rated at 350 kW costs $650,000 which includes the purchase and installation costs. The turbine has a swept area of 1500 m2.

It is installed in a location with year-around average power density available in the wind of 320 W/m2, and on the average converts 25% of the energy into electricity.

The electricity is sold to the grid at $0.05/kWh, paid at the location of the turbine (i.e. no transmission cost). The turbine has a 20-year life with a salvage value of $20,000. The discount rate is 8%.

Calculate the net present value of this investment (NPV).

Reference no: EM132057146

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