What is the future worth of the project

Reference no: EM131865037

Southern Ontarion is planning to build a new solar power station. The project will start in 2023 and is planned to take 3 years at a cost of $150 million per year. After project completion, the cost of maintenance and repair is expected to be $10 million for the first year, and to increase by $100,000 per year thereafter. The Salvage/scrap value of the station at the end of year 2060 is estimated to be $30 million.The new solar station is expected to save the city $45 million per year. Consider the present to be the end of 2016/beginning of 2017 and the interest rate to be 6%. a) Draw a cash flow diagram for this project (from present till year 2061) b) What is the Present Worth of the project? c) Waht is the Future Worth of the project? d) Is it a good investment for the city to make? Please answer in detail. This question is already answered, but it is not clear. Please answer in detail.

Reference no: EM131865037

Questions Cloud

What would the annual yield to maturity be on bond : What would the annual yield to maturity be on the bond if you purchased the bond today?

You will pay during the first five years of loan life : How much total interest you will pay during the first five years of the loan life?

What is annualized return from these two investments : What is your annualized return from these two investments if, in six months, MMEE is selling for $48 per share? What about $36 per share?

Sales using regression to estimate trend : What would be the forecast for next year’s sales using regression to estimate a trend?

What is the future worth of the project : Draw a cash flow diagram for this project (from present till year 2061) What is the Present Worth of the project? What is the Future Worth of the project?

What will be new beta of your portfolio this transaction : What will be the new beta of your portfolio following this transaction?

The firm at fixed price for stated period of time : obligation to sell securities directly to the firm at a fixed price for a stated period of time.

How much would the external financing needs : how much would the external financing needs be for CE if it is working at 100% of capacity?

Explain purpose of insurance as risk management tool : Explain the purpose of insurance as a risk management tool. In homeowners insurance, how is “loss of use” calculated?

User Account

All Pages