A university spent $1.7 million to install solar panels atop a parking garage. These panels will have a capacity of 600 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 30%, 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? 2,848.33 3,987.66 1,424.17 2,278.66 $119,209.36 If the solar panels can operate only for 2,563 hours a year at maximum, the project $255,448.62 break even $187,328.99 Continue to assume that the solar panels can operate only for 2,563 hours a year at maximum. $170,299.08 in order for the project to be worthwhile (.e., at least break even), the university would need a grant of at least
A university spent $1.7 million to install solar panels atop a parking garage. These panels will have a capacity of 600 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 30%, 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? 2,848.33 3,987.66 1,424.17 2,278.66 $119,209.36 If the solar panels can operate only for 2,563 hours a year at maximum, the project $255,448.62 break even $187,328.99 Continue to assume that the solar panels can operate only for 2,563 hours a year at maximum. $170,299.08 in order for the project to be worthwhile (.e., at least break even), the university would need a grant of at least
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A university spent $1.7 million to install solar panels atop a parking garage. These panels will have a capacity of 600 kilowatts (kW) and have a life
expectancy of 20 years. Suppose that the discount rate is 30%, 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?
2,848.33
3,987.66
1,424.17
2,278.66
$119,209.36
If the solar panels can operate only for 2,563 hours a year at maximum, the project
$255,448.62
break even
$187,328.99
Continue to assume that the solar panels can operate only for 2,563 hours a year at maximum.
$170,299.08
in order for the project to be worthwhile (.e., at least break even), the university would need a grant of at least
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