Question

Can someone solve this for me (part b)  using excel, please?

In southern California a photovoltaic (PV) system for a certain home costs $27,500 for parts and installation. This 6.2 kW system requires 400 ftof rooftop space and has an estimated life of 20 years. a. If this PV system saves $250 each month in electricity expenses, what is the simple payback period in months? b. If the market value of the PV system is negligible, what is the system's IRR? a. The simple payback period for the PV system is 110 months. (Round to the nearest whole number.) b. The IRR of the PV system is 0% per month. (Round to one decimal place.)

In southern California a photovoltaic​ (PV) system for a certain home costs

​$27 comma 50027,500

for parts and installation. This

6.26.2

kW system requires

400400

ft2

of rooftop space and has an estimated life of

2020

years.

a. If this PV system saves

​$250250

each month in electricity​ expenses, what is the simple payback period in​ months?

b. If the market value of the PV system is​ negligible, what is the​ system's IRR?

Answer 1

Part B.

C E F H IRR of the investment IRR of the investment 2 Investment =IRR(E2:E242) 0 -27500 3 Monthly savings 0.008 250 2 250 3 250 4 250 5 250 6 250 7 250 10 250 250 12 10 250 13 11 250 14 12 250 15 13 250 16 14 250 17 15 250 18 16 250 19 17 250 20 18 250 21 19 250 22 20 Sheet? 250 Sheet1 Sheet3

So,

IRR per month = .8%

Here, in cell E-3 to E-242, the monthly savings $250 is mentioned and in cell E-2, initial investment is mentioned to calculate the IRR using excel.

Excel formula used to calculate IRR = IRR(E2:E242)