A solar lighting system is to be purchased and installed for 310,000. This system will save approximately 300,000 kWh of electric power each year for a 6-year period with no additional O&M costs. Assume the cost of electricity is 10 per kWh, and company’s MARR is 15% per year, and the market value of the system will be 10,000 at EOY 7. Using the PW method, is this a good idea?
A solar lighting system is to be purchased and installed for 310,000. This system will save approximately 300,000 kWh of electric power each year for a 6-year period with no additional O&M costs. Assume the cost of electricity is 10 per kWh, and company’s MARR is 15% per year, and the market value of the system will be 10,000 at EOY 7. Using the PW method, is this a good idea?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A solar lighting system is to be purchased and installed for 310,000. This system
will save approximately 300,000 kWh of electric power each year for a 6-year
period with no additional O&M costs. Assume the cost of electricity is 10 per
kWh, and company’s MARR is 15% per year, and the market value of the system
will be 10,000 at EOY 7. Using the PW method, is this a good idea?
Transcribed Image Text:Php 100,000 per year for 4 years. At a 12% MARR, is this a good investment?
2. A solar lighting system is to be purchased and installed for 310,000. This system
will save approximately 300,000 kWh of electric power each year for a 6-year
period with no additional O&M costs. Assume the cost of electricity is 10 per
kWh, and company's MARR is 15% per year, and the market value of the system
will be 10,000 at EOY 7. Using the PW method, is this a good idea?
3. The Kasibu Cooperative has invested a 145,000 new mechanical grading/sorter
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