Consider a 2.0 MW wind turbine that operates with a capacityfactor of 30% (i.e. it produces 5,300 MWh/y). The initial cost is$3.5 million. The project life is 30 years and the salvage value isnegligible. Maintenance costs are $50,000/y. The minimum attractiverate of return is 7%. For each of the following cases, determinethe present value of the project and whether the cost isjustified.
a. Power can be sold to the grid at $0.055/kWh. (ans.-503200, not justified)
b. Power can be sold to the grid at $0.10/kWh. (ans.2456000 justified)
