Question 2: Time Value of Money 2.1. Your company is investigating the possibility of erecting a...

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Question 2: Time Value of Money 2.1. Your company is investigating the possibility of erecting a wind farm in the Western Cape by borrowing the capital amount from the bank. The details follow: Capacity of wind farm: 6 000 kW ● Capital cost: R21 000 000 Life of wind farm: 20 years What is the monthly instalment that your company will have to pay during the life of the wind farm to the Bank to settle the loan? The annual interest rate is 12%. (5) 2.2. More people are experiencing the effects of global warming and climate change and fewer have doubts about it. A number of persons are expecting a transition to a low- carbon economy where solar, wind farms, battery electric vehicles (BEVS) and fuel cell electric vehicles (EVS) are regarded as alternatives to fossil fuel-based energy and 2 transportation. However, such infrastructure is mineral and metal intensive, and additional minerals may be used to a larger extend than before. Lithium, cobalt, nickel, and manganese are important for the manufacturing of batteries used in EVs. According to Seddon (2019) Argus expects the demand for lithium to increase 5-fold from 55 000 tonnes in 2018 to 270 000 tonnes by 2030. This and predictions for nickel and cobalt are summarised in the table below. (9) Metal Actual demand in 2018 Estimated demand in 2030 Lithium, Li 55 000 tonnes 270 000 tonnes Cobalt, Co 110 000 tonnes 300 000 tonnes Nickel, Ni 2,4 million tonnes 4,6 million tonnes Calculate the average annual compounded rate at which demand is expected to grow for each one of the three metals listed in table above. In their Oil 2019 report the International Energy Agency forecasts that demand for oil will increase from 99 million barrels per day in 2018 to 110 million barrels per day by 20 (Creamer, 2019). Calculate the average annual growth rate from the oil prediction compare it with that of Li, Co, and Ni. + Question 2: Time Value of Money 2.1. Your company is investigating the possibility of erecting a wind farm in the Western Cape by borrowing the capital amount from the bank. The details follow: Capacity of wind farm: 6 000 kW ● Capital cost: R21 000 000 Life of wind farm: 20 years What is the monthly instalment that your company will have to pay during the life of the wind farm to the Bank to settle the loan? The annual interest rate is 12%. (5) 2.2. More people are experiencing the effects of global warming and climate change and fewer have doubts about it. A number of persons are expecting a transition to a low- carbon economy where solar, wind farms, battery electric vehicles (BEVS) and fuel cell electric vehicles (EVS) are regarded as alternatives to fossil fuel-based energy and 2 transportation. However, such infrastructure is mineral and metal intensive, and additional minerals may be used to a larger extend than before. Lithium, cobalt, nickel, and manganese are important for the manufacturing of batteries used in EVs. According to Seddon (2019) Argus expects the demand for lithium to increase 5-fold from 55 000 tonnes in 2018 to 270 000 tonnes by 2030. This and predictions for nickel and cobalt are summarised in the table below. (9) Metal Actual demand in 2018 Estimated demand in 2030 Lithium, Li 55 000 tonnes 270 000 tonnes Cobalt, Co 110 000 tonnes 300 000 tonnes Nickel, Ni 2,4 million tonnes 4,6 million tonnes Calculate the average annual compounded rate at which demand is expected to grow for each one of the three metals listed in table above. In their Oil 2019 report the International Energy Agency forecasts that demand for oil will increase from 99 million barrels per day in 2018 to 110 million barrels per day by 20 (Creamer, 2019). Calculate the average annual growth rate from the oil prediction compare it with that of Li, Co, and Ni. +

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