Question
In: Finance
1-20 years Average hourly power output per turbine 0.31 MWh
1-20 years
|
Average hourly power output per turbine |
0.31 |
MWh |
|
|
Operational days per year |
363.00 |
days |
|
|
Capital expenditure per turbine |
3,000,000.00 |
$ |
|
|
Life |
20.00 |
years |
Turbines will be dismantled at end of 20 years if not overhauling. |
|
Salvage per turbine |
200,000.00 |
$ |
Market value at end of 20 years. |
|
Expected price per MWh of power in first year |
80.00 |
$ |
Price per MWh is then expected to increase at inflation. |
|
Expected price per MWh of renewable energy certificate in first year |
70.00 |
$ |
For each MWh generated by the wind turbines, SAI will be issued with a renewable energy certificate which it can sell to electricity retailers who have sold renewable energy to customers. Price of certificates is then expected to increase at inflation. |
|
Expected operating expenses per turbine in first year |
100,000.00 |
$ |
Annual operating expenses then expected to increase by inflation. |
|
Depreciation method |
Straight Line |
||
|
Working capital |
- |
$ |
Given service agreements, there is no working capital requirement |
|
Inflation Rate (p.a.) |
0.026 |
||
|
Tax Rate |
0.30 |
Tax payment occurs at the same year as income |
|
|
Discount Rate |
0.10 |
||
|
Additional Information to extend life to 40 years |
|||
|
Overhaul cost at end of 20th year per turbine |
1,500,000.00 |
$ |
|
|
Life of overhaul |
20.00 |
years |
|
|
Salvage |
- |
$ |
|
|
Depreciation method of overhaul cost |
Straight Line |
Overhaul expense is capitalised and then depreciated over extended life. |
|
|
Treatment of existing capital expenditure (e.g. original outlay) |
- |
$ |
Remaining book value of original capital expenditure written down to zero in year 20. |
Calculate the free cash flows for the extended life of 40 years
Solutions
Expert Solution
| Inflation | 2.60% | Interest Rate | 30% | Price of MWH | 80+70 | 150 | |||
| Discount rate | 10% | Annual production | 0.31*24*363 MWH | 2700.72 | |||||
| Year | Cash outflow | Revenue | Operation cost | Depreciation | Cash before Tax | Tax | Cash after Tax | Add back Depreciation | Net free cash flow from operation |
| 0 | -$30,00,000.00 | -$30,00,000.00 | $0.00 | $0.00 | $0.00 | -$30,00,000.00 | |||
| 1 | $4,05,108.00 | -$1,00,000.00 | -$1,40,000.00 | $1,65,108.00 | -$49,532.40 | $1,15,575.60 | $1,40,000.00 | $2,55,575.60 | |
| 2 | $4,15,640.81 | -$1,02,600.00 | -$1,40,000.00 | $1,73,040.81 | -$51,912.24 | $1,21,128.57 | $1,40,000.00 | $2,61,128.57 | |
| 3 | $4,26,447.47 | -$1,05,267.60 | -$1,40,000.00 | $1,81,179.87 | -$54,353.96 | $1,26,825.91 | $1,40,000.00 | $2,66,825.91 | |
| 4 | $4,37,535.10 | -$1,08,004.56 | -$1,40,000.00 | $1,89,530.55 | -$56,859.16 | $1,32,671.38 | $1,40,000.00 | $2,72,671.38 | |
| 5 | $4,48,911.02 | -$1,10,812.68 | -$1,40,000.00 | $1,98,098.34 | -$59,429.50 | $1,38,668.84 | $1,40,000.00 | $2,78,668.84 | |
| 6 | $4,60,582.70 | -$1,13,693.81 | -$1,40,000.00 | $2,06,888.90 | -$62,066.67 | $1,44,822.23 | $1,40,000.00 | $2,84,822.23 | |
| 7 | $4,72,557.85 | -$1,16,649.84 | -$1,40,000.00 | $2,15,908.01 | -$64,772.40 | $1,51,135.61 | $1,40,000.00 | $2,91,135.61 | |
| 8 | $4,84,844.36 | -$1,19,682.74 | -$1,40,000.00 | $2,25,161.62 | -$67,548.48 | $1,57,613.13 | $1,40,000.00 | $2,97,613.13 | |
| 9 | $4,97,450.31 | -$1,22,794.49 | -$1,40,000.00 | $2,34,655.82 | -$70,396.75 | $1,64,259.07 | $1,40,000.00 | $3,04,259.07 | |
| 10 | $5,10,384.02 | -$1,25,987.15 | -$1,40,000.00 | $2,44,396.87 | -$73,319.06 | $1,71,077.81 | $1,40,000.00 | $3,11,077.81 | |
| 11 | $5,23,654.00 | -$1,29,262.81 | -$1,40,000.00 | $2,54,391.19 | -$76,317.36 | $1,78,073.83 | $1,40,000.00 | $3,18,073.83 | |
| 12 | $5,37,269.01 | -$1,32,623.65 | -$1,40,000.00 | $2,64,645.36 | -$79,393.61 | $1,85,251.75 | $1,40,000.00 | $3,25,251.75 | |
| 13 | $5,51,238.00 | -$1,36,071.86 | -$1,40,000.00 | $2,75,166.14 | -$82,549.84 | $1,92,616.30 | $1,40,000.00 | $3,32,616.30 | |
| 14 | $5,65,570.19 | -$1,39,609.73 | -$1,40,000.00 | $2,85,960.46 | -$85,788.14 | $2,00,172.32 | $1,40,000.00 | $3,40,172.32 | |
| 15 | $5,80,275.01 | -$1,43,239.58 | -$1,40,000.00 | $2,97,035.43 | -$89,110.63 | $2,07,924.80 | $1,40,000.00 | $3,47,924.80 | |
| 16 | $5,95,362.16 | -$1,46,963.81 | -$1,40,000.00 | $3,08,398.35 | -$92,519.51 | $2,15,878.85 | $1,40,000.00 | $3,55,878.85 | |
| 17 | $6,10,841.58 | -$1,50,784.87 | -$1,40,000.00 | $3,20,056.71 | -$96,017.01 | $2,24,039.70 | $1,40,000.00 | $3,64,039.70 | |
| 18 | $6,26,723.46 | -$1,54,705.28 | -$1,40,000.00 | $3,32,018.18 | -$99,605.45 | $2,32,412.73 | $1,40,000.00 | $3,72,412.73 | |
| 19 | $6,43,018.27 | -$1,58,727.62 | -$1,40,000.00 | $3,44,290.66 | -$1,03,287.20 | $2,41,003.46 | $1,40,000.00 | $3,81,003.46 | |
| 20 | -$15,00,000.00 | $6,59,736.75 | -$1,62,854.53 | -$1,40,000.00 | -$11,43,117.79 | $3,42,935.34 | -$8,00,182.45 | $1,40,000.00 | -$6,60,182.45 |
| 21 | $6,76,889.90 | -$1,67,088.75 | -$85,000.00 | $4,24,801.15 | -$1,27,440.34 | $2,97,360.80 | $85,000.00 | $3,82,360.80 | |
| 22 | $6,94,489.04 | -$1,71,433.06 | -$85,000.00 | $4,38,055.98 | -$1,31,416.79 | $3,06,639.19 | $85,000.00 | $3,91,639.19 | |
| 23 | $7,12,545.75 | -$1,75,890.32 | -$85,000.00 | $4,51,655.44 | -$1,35,496.63 | $3,16,158.80 | $85,000.00 | $4,01,158.80 | |
| 24 | $7,31,071.94 | -$1,80,463.47 | -$85,000.00 | $4,65,608.48 | -$1,39,682.54 | $3,25,925.93 | $85,000.00 | $4,10,925.93 | |
| 25 | $7,50,079.81 | -$1,85,155.52 | -$85,000.00 | $4,79,924.30 | -$1,43,977.29 | $3,35,947.01 | $85,000.00 | $4,20,947.01 | |
| 26 | $7,69,581.89 | -$1,89,969.56 | -$85,000.00 | $4,94,612.33 | -$1,48,383.70 | $3,46,228.63 | $85,000.00 | $4,31,228.63 | |
| 27 | $7,89,591.02 | -$1,94,908.77 | -$85,000.00 | $5,09,682.25 | -$1,52,904.67 | $3,56,777.57 | $85,000.00 | $4,41,777.57 | |
| 28 | $8,10,120.39 | -$1,99,976.40 | -$85,000.00 | $5,25,143.99 | -$1,57,543.20 | $3,67,600.79 | $85,000.00 | $4,52,600.79 | |
| 29 | $8,31,183.52 | -$2,05,175.78 | -$85,000.00 | $5,41,007.73 | -$1,62,302.32 | $3,78,705.41 | $85,000.00 | $4,63,705.41 | |
| 30 | $8,52,794.29 | -$2,10,510.35 | -$85,000.00 | $5,57,283.93 | -$1,67,185.18 | $3,90,098.75 | $85,000.00 | $4,75,098.75 | |
| 31 | $8,74,966.94 | -$2,15,983.62 | -$85,000.00 | $5,73,983.31 | -$1,72,194.99 | $4,01,788.32 | $85,000.00 | $4,86,788.32 | |
| 32 | $8,97,716.08 | -$2,21,599.20 | -$85,000.00 | $5,91,116.88 | -$1,77,335.06 | $4,13,781.82 | $85,000.00 | $4,98,781.82 | |
| 33 | $9,21,056.70 | -$2,27,360.78 | -$85,000.00 | $6,08,695.92 | -$1,82,608.78 | $4,26,087.14 | $85,000.00 | $5,11,087.14 | |
| 34 | $9,45,004.17 | -$2,33,272.16 | -$85,000.00 | $6,26,732.01 | -$1,88,019.60 | $4,38,712.41 | $85,000.00 | $5,23,712.41 | |
| 35 | $9,69,574.28 | -$2,39,337.23 | -$85,000.00 | $6,45,237.05 | -$1,93,571.11 | $4,51,665.93 | $85,000.00 | $5,36,665.93 | |
| 36 | $9,94,783.21 | -$2,45,560.00 | -$85,000.00 | $6,64,223.21 | -$1,99,266.96 | $4,64,956.25 | $85,000.00 | $5,49,956.25 | |
| 37 | $10,20,647.57 | -$2,51,944.56 | -$85,000.00 | $6,83,703.01 | -$2,05,110.90 | $4,78,592.11 | $85,000.00 | $5,63,592.11 | |
| 38 | $10,47,184.41 | -$2,58,495.12 | -$85,000.00 | $7,03,689.29 | -$2,11,106.79 | $4,92,582.50 | $85,000.00 | $5,77,582.50 | |
| 39 | $10,74,411.21 | -$2,65,215.99 | -$85,000.00 | $7,24,195.21 | -$2,17,258.56 | $5,06,936.65 | $85,000.00 | $5,91,936.65 | |
| 40 | $11,02,345.90 | -$2,72,111.61 | -$85,000.00 | $7,45,234.29 | -$2,23,570.29 | $5,21,664.00 | $85,000.00 | $6,06,664.00 |
jeff jeffy answered 3 months agoRelated Solutions
1-20 years 5 turbines Average hourly power output per turbine: 0.31 MWh Operational days per year...
1-20 years
5 turbines
Average hourly power output per turbine: 0.31
MWh
Operational days per year 363.00 days
Capital expenditure per turbine
$3,000,000.00
Life 20.00 years (Turbines will be dismantled
at end of 20 years if not overhauling.)
Salvage per turbine $200,000.00 (Market value
at end of 20 years.)
Expected price per MWh of power in first year
$80.00 (Price per MWh is then expected to increase
at inflation.)
Expected price per MWh of renewable energy certificate in first
year...
A combined gas turbine–vapor power plant has a net power output of 200 MW. Air enters...
A combined gas turbine–vapor power plant has a net power
output of 200 MW. Air enters the compressor of the gas turbine at
300 kPa, 1200 K, and is compressed to 1000 kPa. The pressure ratio
of the gas turbine cycle is 11. Steam leaving the turbine of the
vapor power cycle are used to heat the steam at 6 MPa to 350C in a
heat exchanger. The combustion gases leave the heat exchanger at
420 K. An open feedwater...
Basic hourly rate = Gh 80 Incentive on rate =20% Required a)Output is expected to be...
Basic hourly rate = Gh 80
Incentive on rate =20%
Required
a)Output is expected to be 10units per hour
b)Calculate the rate perwork rate
The total amount to be paid on the total wage if 100units were
produced in 8-hour day .
2. Hourly rate = ghc 10 per hour
Agreed production rate=50 units per hour
Hours worked =8hours
Units produced for the period =1000units
Required : calculate his wage using the piecework method
3.A firm basic rate is c50...
A small-scale Kaplan turbine has a power output of 8MW, an available head at turbine entry of 13.4 m, and a rotational speed of 200rev/min.
A small-scale Kaplan turbine has a power output of $8 \mathrm{MW}$, an available head at turbine entry of $13.4 \mathrm{~m}$, and a rotational speed of $200 \mathrm{rev} / \mathrm{min}$. The inlet guide vanes have a length of $1.6 \mathrm{~m}$ and the diameter at the trailing edge surface is $3.1 \mathrm{~m}$. The runner diameter is $2.9 \mathrm{~m}$ and the hub-tip ratio is 0.4. Assuming the hydraulic efficiency is $92 \%$ and the runner design is "free-vortex," determineThe radial and tangential components...
What is the total power output of our Sun (i.e. the energy output per second)? (a)...
What is the total power output of our Sun (i.e. the energy
output per second)? (a) Assume all of power is released from
nuclear reactions, how much mass is the Sun currently losing every
second? (b) how many years would it take for the sun to lose 1% of
its total mass, if it keeps losing mass at the current rate?
Superheated steam at 20 MPa, 640°C enters the turbine of a vapor power plant. The pressure...
Superheated steam at 20 MPa, 640°C enters the turbine of a vapor
power plant. The pressure at the exit of the turbine is 0.5 bar,
and liquid leaves the condenser at 0.4 bar at 75°C. The pressure is
increased to 20.1 MPa across the pump. The turbine and pump have
isentropic efficiencies of 81 and 85%, respectively. Cooling water
enters the condenser at 20°C with a mass flow rate of 70.7 kg/s and
exits the condenser at 38°C. For the...
1- Assume that visitors of a hotel on average pay $20 for minibar per night per...
1- Assume that visitors of a hotel on average pay $20 for
minibar per night per room, with a standard deviation of $3. Assume
further that minibar expenses are normally distributed.
a- What percentage of rooms are expected to pay more than $25 per
night, i.e. P(x > 25)
b- What percentage of rooms are expected to pay more than $40 per
night, i.e. P( x > 40)?
c- What percentage of rooms are expected to pay less than $12...
Department of Labor reported the average hourly earnings for production workers to be $15.23 per hour...
Department of Labor reported the average hourly earnings for
production workers to be $15.23 per hour in 2001. A sample of 75
production workers during 2003 showed a sample mean of $15.86 per
hour. Assuming the population standard deviation is $1.50, can we
conclude that an increase occurred in the mean hourly earnings
since 2001? Use α = .05
Suppose that Marta's hourly wage is $20 per hour, her rental property yields $100 per day,...
Suppose that Marta's hourly wage is $20 per hour, her
rental property yields $100 per day, and she has 16 hours in a day
to allocate between leisure and work.
a. What is her daily budget constraint? Draw it in a
diagram.
b. How much can Marta consume if she enjoys 16 hours of
leisure?
c. Suppose that the government imposes a 25% income tax.
What is her budget constraint now? n the same diagram, using a
dashed line, draw...
A pointer laser has an average output power of 0.9 mW and a beam diameter of...
A pointer laser has an average output
power of 0.9 mW and a beam diameter of 1.2 mm.
(a) What is the force exerted by the
laser beam on a perfectly reflecting surface ?
(b) Is this force much
larger, smaller, or about the same compared to
the weight of a 0.1 gram drop of water ( 1x10-4x9.8 =
9.8x10-4 Newton )
(c) What is the rms electric field
produced by this laser ?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Use the bond term's below to answer the question Maturity 7 years Coupon Rate 4% Face...
- What experience have you had with Organization Development or with Change Management? Describe the organization, the...
- 1. Renfro Rentals has issued bonds that have a 12% coupon rate, payable semiannually. The bonds...
- Given an array of positive integers a, your task is to calculate the sum of every...
- Define “culture.” Software is defined by the Merriam-Webster Dictionary as "the programs that run on a...
- In humans, hypotrichosis (sparse body hair) is a rare autosomal recessive condition. Let h = hypotrichosis...
- Increase all of the listing prices by 5% for all listings under $500,000 and 10% for...
ADVERTISEMENT