Tabulate the annual cash flows of a solar energy system that has an initial cost of $7,000 for a 12-year analysis. Also estimate the life cycle savings and the internal rate of return. The following economic parameters apply:
Down payment = 20%.
Interest rate = 9%.
First-year fuel saving = $1, 250.
Market discount rate = 8%.
Fuel inflation rate = 7%.
Maintenance and parasitic cost = 0.5% increasing at 1% per year.
Resale value = 25%.