A university spent $1.5 million to install solar panels atop a parking garage. These panels will have a capacity of 200 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? 1,468.26 2,936.51 3,230.16 4,111.11 If the solar panels can operate only for 2,643 hours a year at maximum, the project Continue to assume that the solar panels can operate only for 2,643 hours a year at maximum. break even. In order for the project to be worthwhile (1.e., at least break even), the university would need a grant of at least,
A university spent $1.5 million to install solar panels atop a parking garage. These panels will have a capacity of 200 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? 1,468.26 2,936.51 3,230.16 4,111.11 If the solar panels can operate only for 2,643 hours a year at maximum, the project Continue to assume that the solar panels can operate only for 2,643 hours a year at maximum. break even. In order for the project to be worthwhile (1.e., at least break even), the university would need a grant of at least,
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter16: Bargaining
Section: Chapter Questions
Problem 2MC
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Transcribed Image Text:A university spent $1.5 million to install solar panels atop a parking garage. These panels will have a capacity of 200 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?
1,468.26
2,936.51
3,230.16
4,111.11
If the solar panels can operate only for 2,643 hours a year at maximum, the project
Continue to assume that the solar panels can operate only for 2,643 hours a year at maximum.
break even.
In order for the project to be worthwhile (1.e., at least break even), the university would need a grant of at least,
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Step 1: Understand the concept of break-even analysis in energy investments
VIEWStep 2: Calculate the present value of operating the solar panels for 1 hour per year
VIEWStep 3: Calculate the break-even hours per year
VIEWStep 4: Evaluate the viability of the project
VIEWStep 5: Determine the Required Grant for the Project to Break Even
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