Purchase Solution

Calculating the Minimum Amount of Grant

Not what you're looking for?

Ask Custom Question

A university spent $1.8 million to install solar panels atop a parking garage. These panels will have a capacity of 500 kw, have a life expectancy of 20 years and suppose the discount rate is 10%.

a. If electricity can be purchased for costs of $0.10 per kwh, how many hours per year will the solar panels have to operate to make this project break even?

b. If efficient systems operate for 2,400 hours per year, would the project break even?

c. The university is seeking a grant to cover capital costs. How big of a grant would make this project worthwhile (to the university)?

Purchase this Solution
Solution Summary

Solution describes the steps to estimate the minimum amount of grant needed in the given case.

Solution Preview

a. If electricity can be purchased for the cost of $0, 10 per kWh, how many hours per year will the solar panels have to operate to make this project break even?

Let solar panels operate x number of hours per year.
Energy produced per year=500*x=500x
Revenue saved per= ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Basics of corporate finance

These questions will test you on your knowledge of finance.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

View More Free Quizzes
Related BrainMass Solutions

  • A divisional manager receives a bonus based on 10% of the re

    The division had $2,000,000 in average operating assets. The minimum required rate of return for the division was 15%. What was the amount of the manager's bonus?

  • Minimum Amount of Lump Sum Payment

    By lump sum payment formula, minimum amount = 25000 * [(1-1.1^(-30))/0.1]=235700 The solution gives detailed steps on calculating the minimum amount of lump-sum payment. All formula and calculations are shown and explained.

  • Stock Options

    Should stock option compensation be included as an expense when calculating an organization's net income? Why or why not? If so, how should the amount of expense be calculated?

  • Security Manager

    This solution includes questions asked by a security manager to determine the type and amount of access a new user will be given.

  • What are the future benefits companies derive from these ...

    Amortization of unrecognized prior service cost happens because company's grant plan amendments with the expectation that they will receive economic benefits in future periods by allocating the cost of the benefits to the pension expense in the future

  • Allowance for Doubtful Accounts.

    Determine the balance of Allowance for Doubtful Accounts at March 31. There is an error in calculating the allowance for doubtful debts. There are two methods available to you - 1. As a percentage of sales 2.

  • Return on investment, residual income, and economic value added.

    EVA is an estimate of the amount by which earnings exceed or fall short of the required minimum rate of return for shareholders or lenders at comparable risk.

  • Not for Profit Accounting

    266612 Not for Profit Accounting On January 1, 2009, the first day of the fiscal year, the City of Carter received notification that a federal grant in the amount of $550,000 was approved.

  • Analyzing the given cost patterns

    Revenue saved if it operates 2400 hours per year=2400*500*0.10=$120,000 per year PV of revenue saved=120000*PV factor=120000*8.5136=$1,021,632 Minimum amount of grant needed=1800000-1021632=$7,78,368 2.Last year a toy manufacturer introduced a

View More Related Solutions