Renewable Energy Project Financial Plan Coursework

Renewable Energy Project Financial Plan - Coursework Example Duke Energy alongside the plan will be depended on a current purchase by Duke Energy (DUK) within the solar energy. The goal is to debate on the project’s decision and cost evaluation process. This plan will entail project cost of capital, cash flows, cash flow statement, approximation of capital in every hazard classification, risk class of assets, exhaustive financial features of the enterprise, as well as the validation debate of whether the project must be undertaken. Black Mountain Solar Project Duke Energy currently bought an Arizona solar farm investment from Solon Corporation. The Black Mountain Solar Project is a 10-Megawatt (MW) 40,000 solar panel renewable energy farm located in Mohave County, Arizona. Project Cash Flow The ensuing spreadsheet indicates the cash flows, net present value (NPV), as well as the internal rate of return (IRR) for the Solar Farm Project that Duke Energy is interested in purchasing. Calculations for the Project Cash Flow Period Cash Flows NPV $35,366.48 Dec-08 453,000.00 Dec-09 556,000.00 Dec-10 128,000.00 Dec-11 440,000.00 Dec-12 550,000.00 Dec-13 740,000.00 NPV at 15% rate for a period of five years is $ 35,366.48 Cost of Project Capital The phrase cost of project capital is usually misunderstood. For instance, it is not the company’s past cost of finances like a coupon settlement of present stocks. The essential cost is a chance cost. This refers to the rate by which investors may offer funds for the capital budget project under concern now† Emery, Finnerty, & Stowe, 2007). Cost of capital: = %debt*After Tax Cost Of Debt + %equity*Required Return On Equity After Tax Cost Of Debt = (1-TaxRate)*Required Return On Debt Required Return On Equity = Risk Free Rate + Beta*(Return On Market – Risk Free Rate) = (313.38 + 0.16)/ 21.56 = 14.72 = 15%. Project Cost Flow Project cash flow PVIF@ 15% P.V Year 1 2 3 4 5 556000 128000 440000 550,000 740,000 0.8696 0.7561 0.6575 0.5485 0.4360 483497 96781 289300 364825 480395 Less initial capital 372000 +NPV 1342798 IRR using 15% Years Cash flow PVIF@ 15% P.V 1 2 3 4 5 556000 128000 440000 550000 740000 0.8696 0.7561 0.6575 0.5485 0.4360 483497 96781 289300 364825 480395 1714998 Using 10% Years Cash flow PVIF@ 15% P.V 1 2 3 4 5 556000 128000 440000 550000 740000 0.8696 0.7561 0.6575 0.5485 0.4360 505459.6 105779.2 330572 402657.9 512475.6 1856944.3 Therefore IRR = x[Z/-c = w – r/x – 7] + r = z = w – r + r x - c x -7 = z = 15% - 10% + 10% 569810.8 72232.8 72232.8 z = 2849054 z = 2849054 72232.8 = 39.44 + 10% IRR = 49.44 Cash Flow Statement Years Ended December (In millions) 2011 CASH FLOWS OPERATING ACTIVITIES Net Income $ 2,235 Changes to settle net income to net cash offered by functioning activities Depreciation and amortization (including amortization of nuclear fuel) 2,026 Equity component of AFUDC (260) Gains on sales of other assets (19) Impairment of goodwill and other long-lived assets 335 Deferred income taxes 602 Equity in earnings of unconsolidated affiliates (160) Contributions to qualified pension plans (200) Accrued pension and other post-retirement benefit costs 104 (Increase) decrease in Net realized and unrealized mark-to-market and hedging transactions (48) Receivables 2 Inventory (247) Other current assets 185 Increase (decrease) in Accounts payable 41 Taxes accrued 27 Other current liabilities (254) Other assets 12 Other liabilities (188) Net cash provided by operating

Michigan History2 Research Paper Example | Topics and Well Written Essays - 250 words

Michigan History2 - Research Paper Example The area was also important to the French because it acted as a link between the Great lakes in the West and the Illinois County in the South. The area grew to become a military town, housing the French military. The inhabitants of this town would have looked forward to having one of the greatest commercial centers and a Military Fort. In the late 17th Century, the French were abandoning their forts in America. Viewing this as an invitation to the British to occupy the evacuated Forts, Cadillac requested the French government to allow him to build a new settlement in the Northern part of America. He chose to settle in the area near Lake Huron, then known as Le Detroit. He chose this area because of its fertile land, its hospitable climate, and its strategic location near the river. He brought Farmers, traders, soldiers, artisans and Native Americans from Montreal to settle in the place which later became known as Detroit. The final resting place of this famous Jesuit priest who helped convert Indians to Catholicism has been a subject of controversy over the years. He died on 18th may, 1675, aged 38 after enduring a fight with Tuberculosis. In 1972, bones believed by many scholars to be his were excavated at St. Ignace. These bones might have been brought by Indians. Other places associated with his final resting place include Ludington and