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The management of Deep Pocket Fund have requested that you provide a detailed financial analysis of each option and prepare a report that recommends a preferred option. The following requests have...

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The management of Deep Pocket Fund have requested that you provide a detailed financial analysis of each option and prepare a report that recommends a preferred option. The following requests have been made about the analysis and report: - The financial analysis is to be completed in Excel. The file is to be easily adjustable for different scenarios and all inputs must be in the one sheet called ‘Assumptions’. The analysis of each solar system type must be on a separate sheet. - The report is to be short (600 words + 20% tolerance) and written in a manner that can be understood by a person with a basic understanding of financial analytical tools. - The report sections include: Summary, Methodology, Recommendations and Limitations. o Summary: brief outline of the task and advises of the recommendation. o Methodology: must explain and justify the methodology employed. o Recommendations: recommend a preferred option. In addition, includes analysis on the sensitivity of the decision to the discount rate (e.g. try between 5% and 15%). o Limitations: must identify key limitations with the analysis (recommend additional analysis to alleviate these limitations where appropriate)
Answered Same Day May 09, 2021 EFB210

Solution

Sweta answered on May 11 2021
149 Votes
Assumptions
    Key inputs
    Project life    30
    Land cost    $ 5,000,000
    Land appreciation rate per annum    1.50%
    Sale price per MWh    80
    Price increase per 3 years    2
    First 5 year gov bonus per MWh    70
    Cleaning cost in year 30    $ 50,000
    Discount rate    9%
    Tax    30%
    Discounted capital gain tax    15%
    Days per year    365
    Efficiency lose yearly    0.75%    per annual
    Solar System
    Rotating system
    Installation cost per MWh    $ 1,300,000
    Total installed capacity    25    MWh
    Effective hours per day    5.6
    Maintenance cost percentage of sales    10%
    depreciation    straight line zero salvage
    Fix system
    Installation cost per MWh    1100000
    Total installed capacity    30    MWh
    Effective hours per day    4.5
    Maintenance cost percentage of sales    8%
    depreciation    straight line zero salvage
Analysis rotating system
                Year 1    Year 2    Year 3    Year 4    Year 5    Year 6    Year 7    Year 8    Year 9    Year 10    Year 11    Year 12    Year 13    Year 14    Year 15    Year 16    Year 17    Year 18    Year 19    Year 20    Year 21    Year 22    Year 23    Year 24    Year 25    Year 26    Year 27    Year 28    Year 29    Year 30    Total
    Production per year MWH            51,100    50,717    50,336    49,959    49,584    49,212    48,843    48,477    48,113    47,752    47,394    47,039    46,686    46,336    45,988    45,643    45,301    44,961    44,624    44,289    43,957    43,628    43,300    42,976    42,653    42,333    42,016    41,701    41,388    41,078    1,377,388
    Revenue per MWH            150    150    150    152    152    82    84    84    84    86    86    86    88    88    88    90    90    90    92    92    92    94    94    94    96    96    96    98    98    98
    Total Revenue            7,665,000    7,607,513    7,550,456    7,593,745    7,536,792    4,035,407    4,102,828    4,072,056    4,041,516    4,106,710    4,075,909    4,045,340    4,108,372    4,077,559    4,046,977    4,107,912    4,077,103    4,046,524    4,105,424    4,074,633    4,044,073    4,100,998    4,070,241    4,039,714    4,094,723    4,064,012    4,033,532    4,086,682    4,056,032    4,025,612    139,693,398
    Maintenance Cost            766,500    760,751    755,046    759,375    753,679    403,541    410,283    407,206    404,152    410,671    407,591    404,534    410,837    407,756    404,698    410,791    407,710    404,652    410,542    407,463    404,407    410,100    407,024    403,971    409,472    406,401    403,353    408,668    405,603    402,561    13,969,340
    Depreciation            1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    1,083,333    32,500,000
    Profits            5,815,167    5,763,428    5,712,077    5,751,038    5,699,780    2,548,533    2,609,212    2,581,518    2,554,031    2,612,705    2,584,985    2,557,473    2,614,201    2,586,470    2,558,946    2,613,788    2,586,059    2,558,539    2,611,548    2,583,837    2,556,333    2,607,565    2,579,883    2,552,409    2,601,917    2,574,278    2,546,846    2,594,681    2,567,096    2,539,718    93,224,058
    Tax...
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