What are the expected value and standard deviation

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Question: A factory's power bill is $55,000 a year. The first cost of a small geothermal power plant is normally distributed with a mean of $150,000 and a standard deviation of $50,000. The power plant has no salvage value. The interest rate for evaluation is 8%. The project's life is from a discrete uniform distribution that takes on the values 3, 4, 5, 6, and 7. (The life is relatively short due to corrosion.) The annual operating cost is expected to be about $10,000 per year. Using Excel's RAND function, simulate 25 iterations. What are the expected value and standard deviation of the present worth?

Reference no: EM132165310

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