A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 300 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 30%, that electricity can be purchased at $0.10 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? 16,990.05 6,534.64 O 13,069.27

A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 300 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 30%, that electricity can be purchased at $0.10 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? 16,990.05 6,534.64 O 13,069.27

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

4. Individual Problems 5-4
A university spent $1.3 million to install solar panels atop a parking garage. These panels will have a capacity of 300 kilowatts (kW) and have a life
expectancy of 20 years. Suppose that the discount rate is 30%, that electricity can be purchased at $0.10 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?
O 16,990.05
O 6,534.64
O 13,069.27
O 15,683.12
$130,033.86
$104,027.09
If the solar panels can operate only for 11,762 hours a year at maximum, the project
break eve
$182,047.40
Continue to assume that the solar panels can operate only for 11,762 hours a year at maximum.
$65,016.93
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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