1. Using the annuity formula without Excel, verify that the NPV of the power plant is $11,756.21.
NPV= ($135,000×?(1+0.1)?^5-1)/(0.1×?(1+0.1)?^5 )-$500,000=$11,756.21
2. Using the formulas from class and the notes, with a discount rate of 10% verify that the LCOE is $89.31 per MWh.
LCOE=[(($500,000×0.1)/(1-?(1+0.1)?^(-5) ))÷4,500]+$60=$89.31/MWh
3. Using the formulas from class and the notes, with a discount rate of 5% verify that the LCOE is $85.66 per MWh
LCOE=[(($500,000×0.05)/(1-?(1+0.1)?^(-5) ))÷4,500]+$60=$85.66/MWh