Home » 3) A plant that supplies 1 unit of electricity per year, costs $1 billion to build, lasts 25 years, and has an annual operating cost of $0.2 billion;…

3) A plant that supplies 1 unit of electricity per year, costs $1 billion to build, lasts 25 years, and has an annual operating cost of $0.2 billion;…

3) A plant that supplies 1 unit of electricity per year, costs $1 billion to build, lasts 25 years, and has an annual operating cost of $0.2 billion; it costs $0.1 billion to decommission the plant at the end of its lifetime (25 years). (Assume that the construction costs and the operating costs are paid at the beginning of the period, and that the decommissioning

cost is paid at the end of the life of the plant.) The annual discount rate is r, with discount factor  p(roe) = 1/ (1+r) . Write the formula for the present value of the cost of providing 1 unit of electricity for 100 years, including the decommissioning costs. (Hint: First find the present value of providing one unit of electricity for 25 years. Denote this magnitude as Z. Then find the present value of incurring this cost, Z, 4 times: in periods 0, 25, 50, and 75.)

4) A person plans to save $1 for 20 years. They can invest at an annual rate of 10% (r = 0.1). This investment opportunity .compounds annually.(meaning that they receive interest payments at the end of each year). A second investment opportunity pays a return of ~rx100%, compounded every decade. (After one decade, the investment of one

dollar yields 1 + ~r.) For what value of ~r is the person indifferent between these two investments? (Assume that there is no chance that the person wants to cash in the investment before the 20 year period.) Explain the rationale behind your calculation.

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10