A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 400 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 10%, that electricity can be purchased at $0.30 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first. Approximately how many hours per year will the solar panels need to operate to enable this project to break even? 636.24 1,654.22 1,399.73 O 1,272.48 If the solar panels can operate only for 1,145 hours a year at maximum, the project Continue to assume that the solar panels can operate only for 1,145 hours a year at maximum. break even. In order for the project to be worthwhile (i.e., at least break even), the university would need a grant of at least

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A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 400 kilowatts (kW) and have a life
expectancy of 20 years. Suppose that the discount rate is 10%, that electricity can be purchased at $0.30 per kilowatt-hour (kWh), and that the
marginal cost of electricity production using the solar panels is zero.
Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first.
Approximately how many hours per year will the solar panels need to operate to enable this project to break even?
636.24
O 1,654.22
1,399.73
1,272.48
If the solar panels can operate only for 1,145 hours a year at maximum, the project
Continue to assume that the solar panels can operate only for 1,145 hours a year at maximum.
break even.
In order for the project to be worthwhile (i.e., at least break even), the university would need a grant of at least
Transcribed Image Text:A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 400 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 10%, that electricity can be purchased at $0.30 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first. Approximately how many hours per year will the solar panels need to operate to enable this project to break even? 636.24 O 1,654.22 1,399.73 1,272.48 If the solar panels can operate only for 1,145 hours a year at maximum, the project Continue to assume that the solar panels can operate only for 1,145 hours a year at maximum. break even. In order for the project to be worthwhile (i.e., at least break even), the university would need a grant of at least
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