find the Insurance cost (A43) and Total insurance (A44) for years 1 through 30
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Please help me find the Insurance cost (A43) and Total insurance (A44) for years 1 through 30. Thank you!
![8 Assumptions for Case:
9 Size, kW
10 cost per kW
11 Efficiency rating
15 kw
$7,000 s per kW
Total cost
$
105,000.00
18% %
end-of-life salvag
15%
12 annual degradation
0.50% %
value to deprecia $
89,250.00
13
14 SIP rate
15 system rating
16 design factor
$1.95 per W
12585 W
Notes:
0.9
1) Electricity generation for year 1 is in cell B36 based on a formula in that cell.
17
For each succeeding year electricity generation declines by 0.5%, as stated in the case.
18 tax rate
38% of profits
2) The hurdle rate or discount rate is in cell B30 and is based on an after-tax rate, since all of the
19 tax credit
30% of system cost
cash flows are adjusted for taxes.
20
3) The formula for the Solar Incentive Program (SIP) is in cell B64.
21 Electricity cost
$0.17 per kWh
4) Total cash flow for the payback method is the formula in cell B71.
22 annual increase
3%
5) Number of years for payback is in cell B74.
23
6) Initially assume straight line depreciation over 5 years; in question 3) you will use accelerated depreciation based on MACRS.
24 maintainance
$15 per kw
25 annual increase
2%
26
27 insurance
0.30% of total cost
28 annual increase
2%
29
30 discount rate
3.53%
31
32
33
year
34
1
2
3
4
5
6
7
8
10
11
12
13
14
15
16
17
18
19
35 electricity cost
$0.17
$0.18
$0.18
$0.19
$0.19
$0.20
$0.20
$0.21
$0.22
$0.22
$0.23
$0.24
$0.24
$0.25
$0.26
$0.26
$0.27
$0.28
$0.29
36 electricity generation kW
37 electricity cost savings
23652
$4.020.84
38
39
40 maintainance cost per kW
$15
$15.30
$15.61
$15.92
$16.24
$16.56
$16.89
$17.23
$17.57
$17.93
$18.28
$18.65
$19.02
$19.40
$19.79
$20.19
$20.59
$21.00
$21.42
41 total maint cost (based on 15kW)
42
43 insurance cost
0.30%
0.31%
0.31%
0.32%
0.32%
0.33%
0.34%
0.34%
0.35%
0.36%
0.37%
0.37%
0.38%
0.39%
0.40%
0.40%
0.41%
0.42%
0.43%
44 total insurance
$
315.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2184e3a6-e939-4814-84c4-a520c20b6900%2F2c78d252-6302-49c6-9cae-df09326d25ac%2Fseiqnpo_processed.png&w=3840&q=75)
Transcribed Image Text:8 Assumptions for Case:
9 Size, kW
10 cost per kW
11 Efficiency rating
15 kw
$7,000 s per kW
Total cost
$
105,000.00
18% %
end-of-life salvag
15%
12 annual degradation
0.50% %
value to deprecia $
89,250.00
13
14 SIP rate
15 system rating
16 design factor
$1.95 per W
12585 W
Notes:
0.9
1) Electricity generation for year 1 is in cell B36 based on a formula in that cell.
17
For each succeeding year electricity generation declines by 0.5%, as stated in the case.
18 tax rate
38% of profits
2) The hurdle rate or discount rate is in cell B30 and is based on an after-tax rate, since all of the
19 tax credit
30% of system cost
cash flows are adjusted for taxes.
20
3) The formula for the Solar Incentive Program (SIP) is in cell B64.
21 Electricity cost
$0.17 per kWh
4) Total cash flow for the payback method is the formula in cell B71.
22 annual increase
3%
5) Number of years for payback is in cell B74.
23
6) Initially assume straight line depreciation over 5 years; in question 3) you will use accelerated depreciation based on MACRS.
24 maintainance
$15 per kw
25 annual increase
2%
26
27 insurance
0.30% of total cost
28 annual increase
2%
29
30 discount rate
3.53%
31
32
33
year
34
1
2
3
4
5
6
7
8
10
11
12
13
14
15
16
17
18
19
35 electricity cost
$0.17
$0.18
$0.18
$0.19
$0.19
$0.20
$0.20
$0.21
$0.22
$0.22
$0.23
$0.24
$0.24
$0.25
$0.26
$0.26
$0.27
$0.28
$0.29
36 electricity generation kW
37 electricity cost savings
23652
$4.020.84
38
39
40 maintainance cost per kW
$15
$15.30
$15.61
$15.92
$16.24
$16.56
$16.89
$17.23
$17.57
$17.93
$18.28
$18.65
$19.02
$19.40
$19.79
$20.19
$20.59
$21.00
$21.42
41 total maint cost (based on 15kW)
42
43 insurance cost
0.30%
0.31%
0.31%
0.32%
0.32%
0.33%
0.34%
0.34%
0.35%
0.36%
0.37%
0.37%
0.38%
0.39%
0.40%
0.40%
0.41%
0.42%
0.43%
44 total insurance
$
315.00
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 3 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education