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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?
Attendance at Los Angeles's newest Disneylike attraction, Vacation World, has been as follows- Quarter Guest in Thousands Quarter Guest in Thousands Winter 07 73 Summer 08 12
prepare a ppt
The quesstion is to develop a scattr diagram using total number of shiments and number of defective shiments. This is for Project management mgmt. can some one help me with this
Ques: What do you think happened to the quality, variety, availability or cost of agricultural or manufactured products - or the level of competition? Ans: Quality increased; va
Carpet city recorded the following data on carpet instalations over th past week. Use the data to calculate the average rate (in yards per hour) at which carpet can be installed
Production Planning Procedure
Q1 Evaluate the service to club members and casual flyers by completing a table similar to Table 3.1. Q2 Chart the five performance objectives to show the dif¬fering expectations
Discuss the concept of best practices
Why is information technology such an important element when entering into a VMI agreement? Explain using examples from Eka Chemicals and Interfast.
Compare and contrast patents, copyrights, and trademarks. Evaluate how these provisions can improve the financial position of a small business.
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