Q2) Cost of a 600 kw wind turbine is $ 550000. Other initial costs including that for installation and grid integration are 30% of turbine cost. Useful life of the system is 20 years. Annual operation and maintenance costs plus the land rent come to 3.5% of the turbine cost. Calculate the NPV and COE for the turbine when it is installed at a site having a capacity factor of 0.25. The real rate of interest may be taken as 5%. Illustrate the effect of capacity factor on cost/kWh in the above example. If a utility company buys the generated electricity at a rate of $ 0.1/kWh, find out the break-even capacity factor.

Q2) Cost of a 600 kw wind turbine is $ 550000. Other initial costs including that for installation and grid integration are 30% of turbine cost. Useful life of the system is 20 years. Annual operation and maintenance costs plus the land rent come to 3.5% of the turbine cost. Calculate the NPV and COE for the turbine when it is installed at a site having a capacity factor of 0.25. The real rate of interest may be taken as 5%. Illustrate the effect of capacity factor on cost/kWh in the above example. If a utility company buys the generated electricity at a rate of $ 0.1/kWh, find out the break-even capacity factor.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Chrysler is considering a cost reduction program. the suppliers must reduce the cost of the components that they furnish to Chrysler by 4% each year. program setup $ 13,500,000. the PW if the program is approved is $ ___ million. rn
Q4. [ remaining useful life) are shown in the table below. Assume the MARR is 10% per year. Based on this information, - ] The present worth of the cash flows through year k, PWk for a defender (3- year What is the economic life and the related minimum equivalent uniform annual cost, EUAC, for the defender? a. b. Compute marginal cost, show your calculations and fill the table below. Year(k) Total (marginal) cost PWk EUAC -$14,020 -$28,100 3 -$43,075
Axis Corp. is studying two mutually exclusive projects. Project Kelvin involves an overhaul of the existing system; it will cost $52,500 and generate cash inflows of $25,000 per year for the next 3 years. Project Thompson replaces the existing system; it will cost $265,000 and generate cash inflows of $61,000 per year for 6 years. Using a(n) 9.13% cost of capital, calculate each project's NPV, and make a recommendation based on your findings. The NPV of project Kelvin is $ (Round to the nearest cent.)
The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $30. The unit cost of the giftware is $28. Year 1 2 3 NPV $ 4 Thereafter Unit Sales 21,300 27,900 14,000 4,500 0 It is expected that net working capital will amount to 30% of sales in the following year. For example, the store will need an initial (year O) investment in working capital of 0.3 x 21,300 × $30 = $191,700. Plant and equipment necessary to establish the giftware business will require an additional investment of $189,000. This investment will be depreciated in an asset class with a CCA rate of 25%. We will assume that the firm has other assets in this asset class. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 35%. The discount rate is 18%. What is the net present value of the project? (Round your answer to the nearest whole dollar amount.)
A local county is considering purchasing somedump trucks for the trash pickups. Each truck will cost$55,000 and have an operating and maintenance costthat starts at $18,000 during the first year and increasesby $3,000 per year thereafter. Assume the salvagevalue is $12,000 at the end of 5 years and the interestrate is 10%. To meet the equivalent annual cost of owning and operating each truck over 5-year planning horizon, what is the required annual trash collection fees?
A jewelry firm buys semiprecious stones to make bracelets and rings The supplier quotes a price of S8.30 per stone for quantities of 600 stones or more, S8.70 per stone for orders of 400 to 599 stones, and $0.20 per stone for lesser quantities The jewelry firm operates 102 days per yea. Usage rate is 20 stones per day, and ordering costs are 540. The carrying cost is $3 per year for each stone 1) What is the candidate order quantty at the unit price of 50 207 (Round your answer to the nearest whole number) 2) What is the candidate order quantity at the unit price of $0.707 (Round your ansewer to the nearest whole number) 3) What is the candidate order quantity at the unit price of $8.307 (Round your answer to the nearest whole number.) 4) What order quantity is optimal the intent in to mnimize total annual conts? Round nteredmate calcuations to the nearest whole numbers before compuling the conesponding total annual costs (Round your answer to the nearest whole number 5) What is the…
The projected profit of a hi-tech recording disks retailer is Birr 200,000 for the current year based on sale volume of 200,000 units. The company has been selling the disks for $16 each; variable costs consist of the Birr 10 purchase price and Birr 2 handling cost. The retailer’s annual costs are Birr 600,000. Required: a. Calculate the breakeven point for the current year in units. b. What will be the company’s profit for the current year if there is a 10% increase in projected unit sales volume? c. Management is planning for the coming year when it expects that the unit purchase price of the disks will increase by 30%. What volume of dollar sales must the retailer achieve in the coming year to maintain the current year’s profit if the selling price remains constant at Birr 16
Engineering Economy Show the all Cash Flow Diagram. Don't use Excel You bought a new car which you intend to use as a public utility vehicle for P950,000. The expected life of the car is ten (10) years for its intended use. Your driver and you agreed that for the first five (5) years , your “boundary” is P1,500.00 per day and P1,000.00 per day for the rest of its economic life. You also expected a repair and maintenance costs of P30,000 every six (6) months from year one (1) to five (5) and P50,000 from year six (6) to ten (10). At the end of 10 years you can sell the car for P100,000. If your MARR on invested capital is 15% every (6) months, determine whether this is a good investment. Use the Annual Worth , Present Worth , or the Future Worth method in your solution. Indicate all other assumptions you use in your analysis.
A start up business is considering two types of equipment - data are as follows: ΤΥΡE Α TYPE B First Cost P200,000.00 P300,000.00 Annual operating cost 32,000.00 24,000.00 Annual labor cost 50,000.00 32,000.00 Insurance and property taxes 3% 3% Payroll taxes I 4% 4% Estimated life 10 10 The minimum required rate of return is 15%. What is the exact rate of return? ANSWER: Blank 1
A company is considering the purchase of a fleet of % ton pickup trucks for their contracting business. The owner is trying to decide whether to purchase the trucks with diesel or gas engines. The company specifies an intermal rate of return on equipment purchases of 6% . The owner estimates the following cash flows of costs for a gas and diesel equipped truck. What is the EUAC of the Diesel Truck? Gas Diesel Purchase Purchase Year Fuel Fuel Maintain Maintain $30,000 $250 $300 $39,000 $6,750 $5,000 $1,000 $5,000 $1,500 1 $500 $6,750 $6,750 2 3 $350 $5,000 4 $400 $6,750 $2,000 $5,000 $2,500 $5,000 $3,000 $5,000 $3,500 $5,000 $4,000 | $5,000 5 6. Note: no need to find the common useful life when using EUAC.
We project unit sales for a new household-use laser-guided cockroach search and destroy system as follows: Unit Sales 100,500 112,500 135,500 141,500 94,500 Year 1 2 3 4 5 The new system will be priced to sell at $470 each. The cockroach eradicator project will require $2,100,000 in net working capital to start, and total net working capital will rise to 15% of the change in sales. The variable cost per unit is $340, and total fixed costs are $2,400,000 per year. The equipment necessary to begin production will cost a total of $22 million. This equipment is mostly industrial machinery and thus qualifies for CCA at a rate of 20%. In five years, this equipment will actually be worth about 20% of its cost. The relevant tax rate is 35%, and the required return is 16%. Based on these preliminary estimates, what is the NPV of the project? (Enter the answer in dollars. Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) NPV $…
Assume you started a sideline business in commercial photography last year using your then-owned equipment. Due to excellent success, you plan to purchase new equipment and upgrade your studio facility. First cost of equipment, $ Annual expenses, $ per year Annual revenue, $ per year |-160,000 |-45.000 75,000 Determine the no-return payback period. The no-return payback period is | years.