Question

I need to fill all the table

the interest rate 10%

A privately funded wind-based electric power generation company in the southern part of the country has developed the following estimates PW, S AW, $ FW, S First cost 100,000 259,370 M&O Cost 61,446 10,000 159,374 Benefits 40,000 637,496 Disbenefits 30,723 5,000

Answer 1

Interest rate is given as 10%

	PW, $	AW, $	FW, $
First Cost	100,000	16,274	259,370
M&O Cost	61,446	10,000	159,374
Benefits	245,784	40,000	637,496
Disbenefits	30,723	5,000	79,687

We will find the missing values using Present Value and Future value factors

First, we will find the number of years

Factor involved in calculating PW (using M&O cost)

= M&O cost under PW/M&O cost under AW

= 61,446/10,000

= 6.1446

This is the annuity factor value at 10% for 10 years

Future value annuity factor value at 10% for 10 years is 159,374/10,000 = 15.9374

So the term is 10 years

Calculating, Benefits under PW

= 40,000 x 6.1446

= 245,784

Calculating Disbenefits under FW

= 5,000 x 15.9374

= 79,687

Calculating First Cost under AW

= 100,000/6.1446

= 16,274

Or

= 259,370/15.9374

= 16,274

Note :

We have taken use of future value annuity tables and present value annuity table available. We can also calculate them using calculator or formula.

Present value annuity factor formula

= [ 1 - (1+r)^-n ]/r

Here, we have r as 10% and we know the factor as 6.1446. By substitution we can find value of n as 10.