Business, 30.03.2021 04:20 FAKE5979

A plant is proposing to install a combined heat and power system to supply electrical power and process steam. Power is currently taken from a utility company and steam is generated using on-site boilers. The capital cost of the CHP plant is estimated to be $23 million. Combined heat and power is expected to give net savings of $10 million per year. The plant is expected to operate for 10 years after the completion of construction. Calculate the cumulative net present value of the project, at a discount rate of 12%, using MACRS depreciation with a seven-year recovery term. Also, calculate the discounted cash flow rate of return.

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A plant is proposing to install a combined heat and power system to supply electrical power and proc...