can you solve steo by step Here are the given details:

Initial cost (FC): $3410

Annual energy savings: $1008

A lifetime of retrofitting measures: 25 years

Interest rate for calculations: 4%(you may use your personal MARR)

Natural gas and electricity price increase: 3% annually

Inflation rate: 0%

Salvage value (optional): 10% of the initial value

4. If the retrofit project is financed with a bank loan, what should be the loan interest rate so that

the annual energy savings are able to pay back the annual loan payments? Assume an increase

on the natural gas unit price and electricity of 3% annually; assume an inflation rate of 0%.

(Hint: use an IRR analysis (or RATE), once you transform your inflows (savings) to annualized

payments).

5. Carbon emissions reductions through energy retrofitting measures (optional question/

additional grading points): Due to the low cost of energy in Canada, energy retrofitting

measures are (usually) not financially profitable. A carbon emissions reduction financial

incentive could provide additional motivation to homeowners to undertake such energy savings

measures.

a. Evaluate the proposed energy retrofitting measures based on a Life Cycle Costing

(LCC) analysis, if an incentive of 50$/ton CO2,red is available ($50 for every ton CO2

that was reduced through the energy retrofitting measures) for the carbon emissions

savings (in tonnes CO2) that were achieved through your energy retrofitting measures.

The financial incentive is subject to a 2% increase every year. An increase on the natural

gas unit price and electricity of 3% annually and an inflation rate of 2% is expected.

(Hint: add the carbon emissions incentive value to the inflows of case 3 previously and

find the new NPV, or PW).

b. It is argued that if the value of the carbon emissions reductions incentive is increased,

more homeowners will be willing to undertake energy retrofitting measures. In the case

that your NPV under a) previously is negative, what should be the value of the carbon

incentive (in $/ton CO2,red) so that the NPV of your cash flow is zero? (Hint: let x= value

of the incentive in $/ton CO2,red, set the NPV to zero and solve for x).

Answer rating: 100% (QA)

To solve the given problems step by step lets break them down and address each one individually 4 Calculation of Loan Interest Rate To determine the l... View the full answer