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oration has decided to invest in renewable energy sour ts energy needs for production. It is considering solar ind power. After considering cost savings as well as enues from selling excess electricity into the power grid the following.

oration has decided to invest in renewable energy sour ts energy needs for production. It is considering solar ind power. After considering cost savings as well as enues from selling excess electricity into the power grid the following.

FINANCIAL ACCOUNTING
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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Wildhorse Corporation has decided to invest in renewable energy sources to meet part of its energy needs for production. It is considering solar power versus wind power. After considering cost savings as well as incremental revenues from selling excess electricity into the power grid, it has determined the following. Present value of annual cash flows Initial investment Net present value $ Profitability index Determine the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to 0 decimal places, e.g. 125 and profitability index answers to 2 decimal places, e.g. 15.25.) Solar Solar hich energy source should it choose? $53,200 $40,000 Wind $129,765 $105,500 $ Wind
Transcribed Image Text:Wildhorse Corporation has decided to invest in renewable energy sources to meet part of its energy needs for production. It is considering solar power versus wind power. After considering cost savings as well as incremental revenues from selling excess electricity into the power grid, it has determined the following. Present value of annual cash flows Initial investment Net present value $ Profitability index Determine the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to 0 decimal places, e.g. 125 and profitability index answers to 2 decimal places, e.g. 15.25.) Solar Solar hich energy source should it choose? $53,200 $40,000 Wind $129,765 $105,500 $ Wind
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