Power Plant Parameters: Capital Cost $500,000 r 10% Decision Horizon (T) 5 Years Annual Output 4500 MWh Variable Cost $60 per MWh Total Var. Cost $270,000 per year Sales Price $90 per MWh Annual...

Power

Plant Parameters:

Capital Cost

$500,000

r

10%

Decision Horizon (T)

5

Years

Annual Output

4500

MWh

Variable Cost

$60

per MWh

Total Var. Cost

$270,000

per year

Sales Price

$90

per MWh

Annual Revenue

$405,000

per year

1. Using the annuity

formula without Excel, verify that the NPV of the power plant is $11,756.21.

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2. Using the formulas from class and the notes, with a discount

rate of 10% verify that the LCOE is $89.31 per MWh.

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3. Using the formulas from class and the notes, with a discount

rate of 5% verify that the LCOE is $85.66 per MWh

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