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Question 2125 marks Table Q2 lists the components of the cash-flow for a project with a study period of 25 years. MARR=12% p.a. All payments are EOY payments unless specified otherwise. (a) Determine the PW (at t-0) of the O&M costs. [6 marks) (b) Determine the AW of the revenue. [6 marks) (c) Determine if the project is economically feasible. (5 marks] NUS CONFIDENTIAL CE2184 (d) How much would the project owe (or accumulate) if the project was terminated at the end of the fifteenth year after receiving the revenue but before incurring the upgrading cost. Hint: Find the annual equivalents for the O&M and revenue items in order to tabulate (or calculate) the remaining balance of the project. Item 3 occurs at the beginning of the year and incurs interest for the year. [8 marks) No. 1 2 3 Value (SK) 1500 300 Table Q2-project cash flow components Cashflow component Time (years) Initial construction cost t=0 Upgrading cost 15 Annual O&M costs - first payment t=0 - annual increase Annual revenue - first payment - annual increase 150 15 4 400 6% Question 2125 marks Table Q2 lists the components of the cash-flow for a project with a study period of 25 years. MARR=12% p.a. All payments are EOY payments unless specified otherwise. (a) Determine the PW (at t-0) of the O&M costs. [6 marks) (b) Determine the AW of the revenue. [6 marks) (c) Determine if the project is economically feasible. (5 marks] NUS CONFIDENTIAL CE2184 (d) How much would the project owe (or accumulate) if the project was terminated at the end of the fifteenth year after receiving the revenue but before incurring the upgrading cost. Hint: Find the annual equivalents for the O&M and revenue items in order to tabulate (or calculate) the remaining balance of the project. Item 3 occurs at the beginning of the year and incurs interest for the year. [8 marks) No. 1 2 3 Value (SK) 1500 300 Table Q2-project cash flow components Cashflow component Time (years) Initial construction cost t=0 Upgrading cost 15 Annual O&M costs - first payment t=0 - annual increase Annual revenue - first payment - annual increase 150 15 4 400 6%

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