Not use Ai please gffvjfntwetnykeemsk A wind turbine with a capital cost of $3 million delivers 5million kWh/yr. Assuming a 35% corporate tax rate and a9% corporate discount rate, find the following.a. The present value of the 5-year MACRS (40%, 25%,15%, 10%, 5%, and 5%) depreciation assuming it starts atthe end of the first year of operation.b. The present value of the production tax credit (PTC)assuming a 10-year PTC at a fixed 2.30€/kWh first paid atthe end of the first year of operation.c. What is the net capital cost if we subtract the presentvalues of its MACRS and PTC payments?d. Assuming the above net cost is amortized using a 20-year, 9% CRF, what is the levelized cost of electricity forthis turbine? Compare it to the LCOE without MACRSand PTC.

a) Key Concepts and Formulas Used1. Depreciation and Tax Shield:Depreciation is the allocation of…

Answered: A wind turbine with a capital cost of…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 8P

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A corporation expects to receive $32,000 each year for 15 years from the sale of a product. There will be an initial investment of $150,000. Manufacturing and sales expenses will be $8067 per year. Assume straight line depreciation, a 15-year useful life and no salvage value. Use a 46% income tax rate. What is the before and after-tax rate of return?
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• EXAMPLE: A new machine will be purchased for 150000 TL and sold for 30000 TL at the end of 5 years. An annual income of 75000 TL will be provided. Expected rate of return on investment • 40% Determine annual depreciation amount Analyze the pre-tax economics of the investment If • the income tax rate is 25%, analyze the after-tax economics of the investment
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General Accounting
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