A solar sea power plant (SSPP) is being considered in North American location known for its...
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A solar sea power plant (SSPP) is being considered in North American location known for its high temperature ocean surface and its much lower ocean temperature 90 meters below the surface. Power can be produced based on this temperature differential. The initial investment is $110 million. Net annual revenues are estimated to be $12 million in years 3-6 and increasing with $5 million every coming years 7-15 and then continues the same as previous until the end of 23rd year of project's useful life. Assume residual market value for SSPP is $4 million. The MARR is 5% per year. a. Draw the cash-flow diagram of this project. b. Use the AW method to determine the feasibility of this project. Explain your results and further decision. A solar sea power plant (SSPP) is being considered in North American location known for its high temperature ocean surface and its much lower ocean temperature 90 meters below the surface. Power can be produced based on this temperature differential. The initial investment is $110 million. Net annual revenues are estimated to be $12 million in years 3-6 and increasing with $5 million every coming years 7-15 and then continues the same as previous until the end of 23rd year of project's useful life. Assume residual market value for SSPP is $4 million. The MARR is 5% per year. a. Draw the cash-flow diagram of this project. b. Use the AW method to determine the feasibility of this project. Explain your results and further decision.
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Related Book For
Engineering Economy
ISBN: 978-0133439274
16th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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