Consider four different solar financing options: 1 ) cash upfront ( $ ) 2 ) lease (
Question:
Consider four different solar financing options:
cash upfront $
lease $x per month for years
power purchase agreement $x kwh for years
modified lease with low upfront $month for year and then standard lease $x per month for years
Develop a pricing model in which the net present value of the revenue is equal from all four financing options. Assume a discount rate, a system that produces kWh per year, and a build cost of $ Make other assumptions as needed.
If you have used a builtin net present value formula in your spreadsheet, explain the algebra behind the formula &or demonstrate a simple spreadsheet example.
What price would you offer for each option? Compare the prices between options and explain why the different financing options have different pricing.
Comment on your insights from this model.
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I