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1. Your firm is considering an investment in a wind farm. Assume that the farm will cost $1 million per MW of installed capacity. The plan under consideration would deploy 10 GE 1.5 MW. You are to assess the after-tax profitability of this plan. The wind farm will be placed in a Class 6 wind area, generating an estimated average of 8760 MWh per turbine per year. The price of energy produced is $0.067 per kwh and a production tax credit provide an additional $0.022 per kwh for the first 10 years. You can obtain a very low interest loan for your investment, with an effective interest rate of 2.5% that you will pay off over 30 years. Assume that transmission lines will be provided by a local utility at no cost. Operating expenditures are $10,000 per year, mostly for insurance and occasional maintenance. Your corporate tax rate is 30%. Discount real profits or losses at a rate of 10%. For the three options below, generate an annual nominal cash flow, annual before tax profits, annual after-tax profits, and net present value after tax of the windfarm for the first 20 years (using traditional NPV calculations-do not worry about WACC), assuming zero salvage value and that you have no other deductions or credits for taxation except interest and-
1. The wind turbines can be straight-line depreciated over 15 years.
2. The wind turbines can be MACRS depreciated at 300% declining balance over 6 years, switching to straight-line depreciation on the adjusted basis (as in 4) if ever that provides a greater deduction.
3. The wind turbines can be depreciated 100% in the first year.
Is the wind farm profitable in NPV terms under any of these scenarios after 20 years? Which depreciation method is preferable? Why?
An assembly line with 17 tasks is to be balanced. The longest task is 2.1 minutes, and the total time for all tasks is 23 minutes. The line will operate for 480 minutes per day. a.
rules of variety management
Problem: A leather company manufactures leather jackets and leather handbags. A leather jacket requires 8 square feet of leather, while a handbag requires 2 square feet. In ad
Make one solid recommendation for how the organization you researched could become more productive by applying one of the lessons learned. Explain your rationale.
Assignable Causes - Causes of Variability Variability in process output may also be the result of external causes which are separately identifiable, and which are not inherent
(Shillings) You are traveling abroad and have only American dollars with you. You are currently in the capital but you will soon be heading out to a small town for an extended sta
How might a universal health insurance program change the current trends in the health care industry? In your opinion, are programs like that offered by Aetna to have surgery condu
You have a lease on an oil and gas property with 87.5% NRI that delivers your firm annual profits of $400,000 for five years, with equal production in each year (you will need to t
1. What kind of warning signals would you like fed back from PAC to MRP? 2. Lead times are sometimes called rubbery. What accounts for this concept of elasticity in lead times?
A company is setting up an assembly line to produce 192 units per eight-hour shift. The following table identifies the work elements, items, and immediate predecessors. Questions:
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