# A university spent $1.8 million to install solar panels atop a parking garage. These panels will have ## Question: A university spent$1.8 million to install solar panels atop a parking garage. These panels will have a capacity of 500 kw, have a life expectancy of 20 years and suppose the discount rate is 10%.
a. If electricity can be purchased for costs of \$0.10 per kwh, how many hours per year will the solar panels have to operate to make this project break even?
b. If efficient systems operate for 2,400 hours per year, would the project break even?
c. The university is seeking a grant to cover capital costs. How big of a grant would make this project worthwhile (to the university)?

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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