EBK ENGINEERING ECONOMY
16th Edition
ISBN: 9780133819014
Author: Koelling
Publisher: YUZU
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Textbook Question
Chapter 5, Problem 50P
An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for the plant is $570 million, spread evenly over two years. The operating life of the plant is expected to be 20 years. Additionally, the plant will operate at full capacity 75%of the time (downtime is 25% of any given year) The MARR is 6% per year. (5.8)
- a. If this plant will make a profit of three cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture?
- b. What is the
IRR for the plant? Is it profitable?
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ANSWER: ERR (i %) = 23.71%
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Chapter 5 Solutions
EBK ENGINEERING ECONOMY
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