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Verify that the npv of the power plant

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

NPV= ($135,000×?(1+0.1)?^5-1)/(0.1×?(1+0.1)?^5 )-$500,000=$11,756.21

2. Using the formulas from class and the notes, with a discount rate of 10% verify that the LCOE is $89.31 per MWh.

LCOE=[(($500,000×0.1)/(1-?(1+0.1)?^(-5) ))÷4,500]+$60=$89.31/MWh

3. Using the formulas from class and the notes, with a discount rate of 5% verify that the LCOE is $85.66 per MWh

LCOE=[(($500,000×0.05)/(1-?(1+0.1)?^(-5) ))÷4,500]+$60=$85.66/MWh

Reference no: EM13828482

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