Today (year 0) a new 7-megaWatt (MW) solar panel farm is constructed at a cost of...

Today (year 0) a new 7-megaWatt (MW) solar panel farm is constructed at a cost of MYR14 million. 4 years from today, a smaller 6-MW solar farm will be added to the existing farm. The inflation rate on solar panel construction projects averages 8% per year. If the cost-capacity factor is 0.85 for solar panel construction, what is the estimated capital investment for the smaller 6-MW solar farm?

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Expert Solution

ANSWER:

Given that

Solar panel farm = 7megawatt

Cost = MYR14million

Time =4yrs

Project average=8%per yr

Cost capacity factor=0.85

Estimated capital investment=6MW

We know that,

initially of completely the fee has to be escalated for "Four living from today" inflation rate:
Per MW expenditure in our day = $14 million/7 $2 million

Per MW asking price "Four existence from today" = 2*(1+0.08)^4=$ 2.72097792 million

So expense of6 MW lodge "Four living from today" must be 6 *$ 2.72097792

million= $ 16.32586752 million

Now applying the expense factoring formula as apiece the formula beloW..

SB/SA = (Capp/Capa)^e

(equation 1)

where SA and SB are the expenses of the two akin projects, Capa
and Capg are the capacities of the two projects, and "e is the
exponent (or post factor) that drives the non-linear relation-
ship

$B $16.326 M * (6/7)085 = $16.326 *0.877193144

=$ 14.03509031Million~

Then finally we got the ans

Hence the estimated headquarters investment for the less important 6-MW solar farm

=$14.035 Million

NOTE:IF U LIKE MY ANSWER PLEASE GIVE AN UPVOTE THANK YOU

ekkarill92 answered 1 year ago

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