The table below summarises the financial information for construction of a solar power plant inWestern Australia (Plan A).Land priceInstallation costCost of panels and equipment $6,000,000Maintenance cost per yearFixed electricity pricePlan AService life$200,000End of life valueElectricity production per year 2,000,000 kWh$1,000,000$150,000$0.6 per kWh50 years$3,000,000Alternatively, we can use higher quality panels and equipment to increase annual electricityproduction (Plan B). This increases the cost of panels and equipment to $8,000,000. The annualmaintenance costs are also going to be decreased to $70,000. All of the other parameters remainunchanged. What is the minimum annual electricity production which results in the same benefit tocost ratio for the two plans? Assume an interest rate of 10%.

Production - Production is the process of merging diverse immaterial inputs (plans, knowledge) with…

Answered: The table below summarises the…

The table below summarises the financial information for construction of a solar Western Australia (Plan A). Land price Plan A $200,000 Cost of panels and equipment $6,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

11) The Department of Public Works has $1.1 million to allocate amongst several public projects. Data on these projects are presented in the following table: Annual benefit, Project First cost, $K $K/year Life, years 400 100 10 B 300 100 25 250 80 15 500 70 40 350 90 10 200 60 20 Using a MARR of 15%, rank the projects by their BCR, and comment on the most efficient way to allocate $1.1 million.
An activated sludge plant of capacity X cost $75 million when it was built in 1995. The detailed cost breakdown is given below. Determine a detailed budget estimate of a new similar plant of a capacity 2X in 2020. The capacity factor is 0.86 for this type of plants. Percent of total cost 5% Index Index Index Cost element (1995) 60 (2013) (2020) 116 Feasibility study and design services Labor Materials Equipment including installation costs 100 30% 150 206 228 48% 125 190 172 202 17% 170 215
Locations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an interest rate of 8% per year to determine which location to select, if any. Location North N South S Initial Cost. $ 960,000 2,900,000 Annual Cost, $ per Year 480,000 450,000 Disbenefits, $ per Year 70,000 60,000 00 Life, Years 00 The AB/C ratio is Select location (Click to select) v
E1 A city government is considering increasing the capacity of the current waste water treatment plant. The estimated financial data for the project are as follows: Calculate the benefit-cost ratio for this capacity expansion. Calculate B, I and C’ Calculate BC Ratio
Sheridan Mills management is evaluating two alternative heating systems. Costs and projected energy savings are given in the following table. The firm uses 11.50 percent to discount such project cash flows. Year System 100 System 200 0 –$1,982,100 –$1,854,200 1 206,910 763,700 2 429,830 589,800 3 743,040 671,900 4 1,046,900 426,300 What is the NPV of the systems? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors and intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.)
Prepare the necessary adjusting entries for Tech-Magic Controls at the end of its December 31, 2024, fiscal year-end for each of the following situations. No adjusting entries were recorded during the year. D. Vacation pay of $8,000 for the year that had been earned by employees was not paid or recorded. The company records vacation pay as salaries expense.
n Taraz Company has assembled the following dato with respect to eight projects. Project 1: Initial cost $100,000, NPV- $5.000 Project 2: intial cost $104000, NPv 55,150 Pject innal cost $tOR.000 NPV1530 Project 4: Initial cost $110,000; NPV = $5,450 Project 5: Initial cost $98,000, NPV $4950 Project 6 Ininial cost 596.000, NPV S4,900 Project 7. nitial coot S4000, NPVSAASO Paject ntia con po0 MPY $4,700 Taraz Company can only do one of the projects. Which ONE is the BEST? Note: Your calculator needs to display at least 4 digits after the decimal in order to anewer tha question comecty O Project 1 Project 2 Project 3 Project 4 O Project 5 Project 6 Project 7 Project 8 SUMIT ALL ANEWERS
Don't give answer in image
You are considering the following project. What is the NPV of the project? WACC of the project: 0.10 Revenue growth rate: 0.05 Tax rate: 0.40 Revenue for year 1: 13,000 Fixed costs for year 1: 3,000 variable costs (% of revenue): 0.30 project life: 3 years Economic life of equipment: 3 years Cost of equipment: 20,000 Salvage value of equipment: 4,000 Initial investment in net working capital: 2,000
Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $229,500. Project 2 requires an initial investment of $156,000. Annual Amounts Project 1 Project 2 Sales of new product $ 148,000 $ 128,000 Expenses Materials, labor, and overhead (except depreciation) 77,000 44,000 Depreciation—Machinery 32,000 30,000 Selling, general, and administrative expenses 20,000 32,000 Income $ 19,000 $ 22,000 (a) Compute each project’s annual net cash flow.(b) Compute payback period for each investment.
Apply WACC in IRR. Leeward Sailboats is reviewing the following new boat line: Click on the Icon in order to copy its content into a spreadsheet. Category T₁ Investment Net working capital change Operating cash flow Salvage To - $10,244,762 - $569,000 $3,277,000 What is the IRR of the project? 10.5% (Round to two decimal places.) T2 $3,884,000 T3 $569,000 $4,570,000 $615,000 At what adjusted WACCS will the company accept this project? Hint: Find the IRR of the project, and use it as the maximum adjusted WACC for accepting the project.
Consider the relative costs of a timber pedestrian bridge and a steel one; their initial capital costs, annual OMR costs and useful lives are given below: Initial capital cost Annual OMR cost Life span Timber Bridge $500,000 $30,000 15 years Steel Bridge $700,000 $5000 30 years Find the alternative of the least overall costs (use i = 8%). Use both present worth and annual worth methods.