Problem 9) In the 1950 and early 60s Nuclear power plants were being built. They

Question

Problem 9) In the 1950 and early 60s Nuclear power plants were being built. They used only a few ilbs of uranium which seemed to mean almost no cost for fuel. t was belileved by many the electricity would be "too cheap to meter". In other words, they expected that you would pay a flat "power fee" every month to your electric company and then use whatever you needed (Like a cell phone with unlimited air time) Near Chicago a hypothetical utility named "Take Your Wealth Edison" aggressively began building nuclear plants. Consider the case of a "Take Your Wealth Edison" engineer (Ned Milty) planning a 1000 megawatt power plant (1,000,000 kilowatt). Nerd believes the plant will cost $1,150 per kilowatt to build. A- How much does Ned believe this plant will cost? Ned proposes to issue bonds to pay for 80% of the power plant. B- How many dollars worth of bonds does Ned want to issue? C- How much money will 'Take Your Wealth Edison" have to come up with? D - What will the Utilities annual payments be to retire the bonds? E- How much power will the plant generate every year? F- What will Ned project for his annual operating cost for his Nuke plant? Ned expects to get low cost bonds at 3.5% interest over 30 years. Ned expects to run the power plant at an 87% capacity factor Ned believes that the cost for running his nuke plant will be 0.3 cents per kilowatt hour Ned believes his plant will run for 50 years and that it will sell power for 2 cents/kwh. G-Draw the cash flow that Nerd will project from the viewpoint of "Take Your wealth Edison” investors H- Get the IRR for the cash flow in G.

Explanation / Answer

As per policy i am obligated to do 4 parts of a question at once still i give you six. If you have any problem with six parts then please ask me.

A 1150*1000000 $1,150,000,000.00 B 1150000000*80% $920,000,000.00 C 1150000000-920000000 $230,000,000.00 D 920000000*(A/P(3.5%,30years)) 920000000*(.0544) $50,048,000.00 E Kilo watt capecity                       1,000,000.00 Number of days in year 365 Hours per day 24 Capacity 87% Power genrated every year 1000000*365*24*87% Power genrated every year 7,621,200,000.00 F Annual operating cost   7621200000*0.003 Annual operating cost   $22,863,600.00

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.