Question: Please solve all the parts and empty boxes. Determining and evaluating project cash flows for a home solar system You are keen on the use

Determining and evaluating project cash flows for a home solar system You



 

are keen on the use of solar power and have decided to


Please solve all the parts and empty boxes.

Determining and evaluating project cash flows for a home solar system You are keen on the use of solar power and have decided to evaluate investing in a solar system for your home. After consulting with several solar contractors, you have learned that the installed cost of solar systems is about $2.12 per kilowatt hour (kWh) of rated production and best practice is to install a solar system equal in capacity to your annual electric consumption. You consume 19,000 kWh a year at a current cost of $0.13 per kWh and future costs per kWh are expected to increase 1.51% per year. For the first year of operation, you will receive a tax rebate equal to 23% of the installed cost of the solar system and your marginal tax rate is 25%. Finally, because solar systems have an indefinite life expectancy, you expect to save the cost of electricity for perpetuity. Use the information you have gathered to determine the following: a. The initial cash flow. b. The periodic cash flow for the first ten years. c. Terminal cash flow for year ten using a discount rate of 6%. d. The net present value (NPV) of the project cash flows using a discount rate of 6%. a. The initial cash flow is $ (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.) b. Compute the periodic cash flow for the first ten years. The periodic cash flow in year 1 is $ The periodic cash flow in year 2 is $ The periodic cash flow in year 3 is $ The periodic cash flow in year 4 is $ The periodic cash flow in year 5 is $ The periodic cash flow in year 6 is $ The periodic cash flow in year 7 is $ The periodic cash flow in year 8 is $ (Round to the nearest cent. Type a negative number to indicate a cash outflow and a positive number to indicate cash inflow.)

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