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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?
What unions / unionization does Southwest Airlines have?
a. Assign any value arbitrarily to a row or column variable u or v j . generally a value 0 zero (zero) is assigned to the first row i, e, u = 0. b.Consider every occupied cell
Illiteracy and poor diets have been known to cost countries up to what percent of their productivity?
How might Verwaayen contribute to organizational learning at Alcatel-Lucent?
The first process is expected to incur $280,000 of fixed cost and add $60 of variable cost for each unit produced. The second process has fixed costs of $200, 00 and adds $70 per e
In the past few years, the traffic problems in Lynn McKell's hometown have gotten worse. Now, Broad Street is congested about half the time. The normal travel time to work for Lynn
The key points in Chapter 12 (Chapter 13) tell us that good inventory management is important for successful organizations. The key issues are when to order and how much to order.
1- Are there differences between Microsoft's and Apple's organizational Cultures? Why did Apple's organizational culture disrupt the company? 2- The film portrayed the "pirates
Which of the nine knowledge areas defined in the Project Management Body of Knowledge includes the activities of generating, collecting, distributing, storing, retrieving and dispo
Current and projected cash flows for Randell Global Operatons are shown below. Growth is expected to be constant after 2012, and the weighted average cost of capital is 11%. What i
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