What are the life-cycle savings

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Reference no: EM131980732

A solar process is to deliver 70% of an annual energy requirement of 300 GJ. The solar process equipment cost (installed) is $18,000. The equipment is to be paid for by a 20% down payment and 80% loan at 9% per year over 10 years. The market discount rate is 10%/yr. The resale value is expected to be small. This is not an income-producing facility. Other costs are as follows: insurance, maintenance, and operating power, $250 in first year, expected to inflate at 6% per year. The owner's federal income tax rate is 40% and the installation is in a state where there is no state income tax. Auxiliary energy supplied is 90 GJ/yr, its initial cost is $8.80/GJ, and it is expected to rise at 10% per year. What are the life-cycle savings over a 15-year period?

Reference no: EM131980732

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