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Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You and a friend want to start a residential solar company here in Golden, Colorado. Below are
the estimated sales numbers, revenue per installation, panel costs, operating costs, and up-
front capital cost to get your business up and running. Using a 10% minimum discount rate,
calculate your NPV, ROR (show interpolation), and PVR. Next, calculate the breakeven revenue
per system required to breakeven with other opportunities at 10%.
Solar Pannel Company Economics
3
4
5
Year
1
Gross Revenue Per Installation
65,000
20
25
30
Installations per year
10
15
$4
(50,000)
$
(5,000)
2$
(400,000)
Pannel Cost Per Install
Operating cost per Install
Capital Investment
Transcribed Image Text:You and a friend want to start a residential solar company here in Golden, Colorado. Below are the estimated sales numbers, revenue per installation, panel costs, operating costs, and up- front capital cost to get your business up and running. Using a 10% minimum discount rate, calculate your NPV, ROR (show interpolation), and PVR. Next, calculate the breakeven revenue per system required to breakeven with other opportunities at 10%. Solar Pannel Company Economics 3 4 5 Year 1 Gross Revenue Per Installation 65,000 20 25 30 Installations per year 10 15 $4 (50,000) $ (5,000) 2$ (400,000) Pannel Cost Per Install Operating cost per Install Capital Investment
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