10 An electric utility is removing a cracked heat exchanger The PUC is allowing full recovery for the utility in rates Book Life remaining Book value remain MARR=WACC no. of customers A. What is the Annual Economic Worth? B. What is the monthly rate impact for each customer 400,000,000 40 9% 1000000
10 An electric utility is removing a cracked heat exchanger The PUC is allowing full recovery for the utility in rates Book Life remaining Book value remain MARR=WACC no. of customers A. What is the Annual Economic Worth? B. What is the monthly rate impact for each customer 400,000,000 40 9% 1000000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Can you answer question 10

Transcribed Image Text:10
11
12
$
$
The Net Cash Flows are projected to be
15,000
8%
9400
105000 CAPX
A.
A. Find Present Worth
B. What assumptions in the info
given would you question and why.
An electric utility is removing a cracked heat exchanger
The PUC is allowing full recovery for the utility in rates
Book Life remaining
Book value remain
MARR=WACC
per year Net Cash Flow for 10 years
MARR=Cost of Capital
no. of customers
A. What is the Annual Economic Worth?
B. What is the monthly rate impact for each customer
Salvage Value
An asset has the following
Initial Book Value
Book Life
Salvage Value
Prepare depreciation schedules
Straight Line
B.
Double Declining Method
The City of Wilsonville is adding 10 New natural gas busses
The cost of the busses with compression facility is
4,000,000
12
2.00
1.25
200000
400,000,000
Cost
Bus life (years)
Fuel Cost Savings/Gallon
Environmental credit per Gallon
Total Gallons/Year
4% Current Bond Rate
A. What is the Benefit Cost Ratio for the City
40
9%
1000000
20000
5
2000
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