Question: Unit A needs refitting to increase availability from 80% to 98%. To force the refitting and have it made before the year 2021 will cost

Unit A needs refitting to increase availability from 80% to 98%. To force the refitting and have it made before the year 2021 will cost an additional 2 million during the year 2020. Without forcing the investment, the unit will be retrofitted by the year 2022. A dry year, we have anticipated that a change in price movements would contribute to 10x higher profitability compared to a normal year for unit A. A normal year profitability is about 2 million. There is a 45% chance that a dry year will happen in the year 2021. Should we force the investment? r=6%

Unit A needs refitting to increase availability from 80% to 98%. To

Electric power, supply curve SEK/MW Nuclear/CHP revision, low renewableHigh renewables 1000 900 800 700 600 500 400 300 200 0 5000 10000 15000 20000 25000 35000 30000 MW Electric power, supply curve SEK/MW Nuclear/CHP revision, low renewableHigh renewables 1000 900 800 700 600 500 400 300 200 0 5000 10000 15000 20000 25000 35000 30000 MW

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!