A new type of energy generation facility is being evaluated. For an initial investment of $100 million, annual net revenues are expected to be $15 million in years 1-5 and $20 million in years 6-20. The unit will have a salvage value of $10 million at the end of year 20. Draw a cash flow diagram. b- What is the simple payback? C What is the discounted payback period if the MARR is 6%/year? a- d- What is the IRR? e- Would you recommend this project? Why?

A new type of energy generation facility is being evaluated. For an initial investment of $100 million, annual net revenues are expected to be $15 million in years 1-5 and $20 million in years 6-20. The unit will have a salvage value of $10 million at the end of year 20. Draw a cash flow diagram. b- What is the simple payback? C What is the discounted payback period if the MARR is 6%/year? a- d- What is the IRR? e- Would you recommend this project? Why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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