Question: Samco has been hired to do a study on a modular nuclear reactor generator plan. The plan is to go to the end of 2075.

Samco has been hired to do a study on a modular nuclear reactor generator plan. The plan is to go to the end of 2075. The electrical transmission system will need some upgrades and the distribution system within major centres will need upgrades also. Construction would begin in 2025 and take 10 years at a cost of $30 million per year. The cost of maintenance starts after construction has been completed and for the first year is $4 million, increasing by $100,000 per year each year thereafter. Assume all cash flows occur at year-end. Consider the present to be the end of 2020/beginning of 2021. Assume there is no salvage value at the end of 2075. If the interest rate is 5% nominal annual, compounded monthly, what is the present worth of this project? (work on paper not in Excel)

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