Question

Swifty Corporation has decided to invest in renewable energy sources to meet part of its energy...

Swifty Corporation has decided to invest in renewable energy sources to meet part of its energy needs for production. It is considering solar power versus wind power. After considering cost savings as well as incremental revenues from selling excess electricity into the power grid, it has determined the following.

Solar Wind
Present value of annual cash flows $52,608 $129,765
Initial investment $38,400 $105,500


Determine the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to 0 decimal places, e.g. 125 and profitability index answers to 2 decimal places, e.g. 15.25.)

Solar Wind
Net present value $

$

Profitability index


Which energy source should it choose?

The company should choose

windsolar

energy source.
0 0
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Answer #1

WIND Investment Required Present Value of Annula Cash Flows ( PVCF) Net present Value =PVCF-Investment Profitability index =P

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