Capital cost Financing arrangement
Order ID:89JHGSJE83839 Style:APA/MLA/Harvard/Chicago Pages:5-10 Instructions:
Capital cost Financing arrangement
Capital cost:
Construction cost $85.00 million
Commitment fees and financing cost 5.00 million
Construction draw-down period 18 months
Financing arrangement:
Long-term debt Per cent to be determined by the borrowing capacity using α = 1.20
Equity capital Sponsors (local utility and engineering firm): 40%
Passive investors: 60%
Capital is to be depreciated on straight-line basis over 10 years.
Debt to be paid back in 10 years in equal amounts
Interest rate on debt: 8 per cent per annum
Cash flow projections:
Assumptions:
- Capacity utilization: 95 percent
- Prices at the time the plant is placed in service and contracted growth rates
Electricity $45 per megawatt-hour (MWH), annual increase 5%
Steam $4.00 per thousand pounds; annual increase 5%
Natural gas $3.50 per million BTU; annual increase 4%
- Predicted volumes at 95 percent capacity
Electricity production: 1,550,000 MWH
Steam production 1,060 million pounds
Gas usage 14,700.1 billion BTU
- Operating and other expenses:
First year = $6.5 million; annual increase 5%.
- Tax rate: 40%.
- Residual value of the project (after tax): $70 million
The project is to be evaluated for 15 years. The relevant discount rate for calculating the NPV is 10%.
Calculate the NPV and the IRR
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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