Problem about net present value Initial cost: $500,000 Annual energy saving: 100,000 kWh Present tariff: $1.2 per kWh Subsequent annual increase in tariff: $0.02 per kWh Nominal interest rate: 3% Project life: 10 years (i) Draw the cash flow diagram. (ii) simple payback period (iii) net present worth and (iv) internal rate of return.

Problem about net present value Initial cost: $500,000 Annual energy saving: 100,000 kWh Present tariff: $1.2 per kWh Subsequent annual increase in tariff: $0.02 per kWh Nominal interest rate: 3% Project life: 10 years (i) Draw the cash flow diagram. (ii) simple payback period (iii) net present worth and (iv) internal rate of return.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 21P

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