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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?
A company's sales potential would be equal to market potential when which situations exists? a. Industry marketing expenditures approach infinity for a given marketing env
The total output from a production system in one day is 900 units and the total labour necessary to produce the 900 units is 900 hours. Using the appropriate productivity measure,
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We are agree that the user should be involved in the design of the database. Class, how would you go about the process of designing a database? What processes are involved?
You are to write a paper analyzing an ethical issue (of your choice) in business. You are to identify the key ethical issues and argue a particular ethical position. In your argume
What do you understand by “line balancing
phases of Operations Research
A description of the article and where it was found Identification of the one thing about prototyping that surprised you the most A brief summary of why it surprised you A descript
Operations applications are least prominent for distributors, wholesales, manufacturers or retailers?
Visit the site: Wheaton, IL Sanitary District. This tour of a wastewater treatment plant is an example of a high-volume, public project. • How is capacity defined at a wastewate
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