Could you please include an excel table with its values? Thank you. Here is the

Question

Could you please include an excel table with its values? Thank you.

Here is the pro forma template

Question 1 (20 points): Develop a pro forma set of income and cash flow statements for a wind energy plant with the following parameters, and calculate the plant's NPV, IRR and LCOE: Overnight capital costs are $1.2 million, all incurred in Year O. There is no land acquisition cost assumed here The plant has a salvage value of $200,000 at the end of the plant's life Annual revenues from spot market sales are $400,000 Annual operating costs are $30,000. The plant qualifies for the same 3-Year MACRS schedule that we used in class. The plant faces a 34% tax rate There are no accounts payable or receivable, but the plant is assumed to have a cash net working capital requirement of $300,000, beginning in Year O. This working capital can be liquidated at the end of the final year of operation. The lifetime of the plant is 5 years ·The discount rate is 20% The plant qualifies for a production subsidy of $200,000 per year for all operating years. A hint here is to model this production subsidy as a revenue source The plant produces 10,000 Megawatt-Hours (MWh) of electricity in each year, Years 1 through5 (You'll need this to calculate LCOE.)

Explanation / Answer

$200000

$ 30000

$ 60000

$ 30000

$ 60000

$ 30000

$ 60000

$ 30000

$ 60000

$ 30000

$ 60000

$ 30000

$ 0

EBITDA

(Total Revenue-Fuels

-Operations &

maintenance cost)

Cash Flow Statement

Cash Flow for Investing Activities

(CapEx + Land + Change in Net Working Capital)

Total Cash Flow(operating cash flow+ cash from investing activities)

Calculation of IRR:

(1399336-1200000)/1200000*100=16.61%

Calculation of LCOE:

10000MW hrs per year.

5 years= 5*10000=50000MW hrs

Total net costs= $(60000+30000)*5= $450000

LCOE= 450000/50000= 9

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Revenues Spot Market Sales $ 400000 $ 400000 $ 400000 $ 400000 $ 400000 $ 400000 Capacity Revenues

$200000

$200000 $200000 $200000 $200000 $200000 Anciliary Services Revenues $ 200000 Total Revenues $ 600000 $ 600000 $ 600000 $ 600000 $ 600000 $ 800000 Costs Fuels Operations and maintenance

$ 30000

$ 60000

$ 30000

$ 60000

$ 30000

$ 60000

$ 30000

$ 60000

$ 30000

$ 60000

$ 30000

$ 0

Depreciation $ 200000 $ 200000 $ 200000 $ 200000 $ 200000 $ 200000 Total Expenses $ 290000 $ 290000 $ 290000 $ 290000 $ 290000 $ 230000

EBITDA

(Total Revenue-Fuels

-Operations &

maintenance cost)

$ 510000 $ 510000 $ 510000 $ 510000 $ 510000 $ 770000 EBIT (EBITDA - Depreciation) $ 310000 $ 310000 $ 310000 $ 310000 $ 310000 $ 570000 Taxes @ 34% $ 105400 $ 105400 $ 105400 $ 105400 $ 105400 $ 193800 Net Income(Tax rate*EBIDTA) $ 204600 $ 204600 $ 204600 $ 204600 $ 204600 $ 376200

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