A public private initiative in Texas will significantly expand the wind generated energy throughout the state. The cash flow for one phase of the project involving Centrals point Energy, a transmission utility company, is shown. Given reinvestment rate of 14% per year for excess funds and 10% per year for borrowing rate for extra funds, determine: given MARR= 12%
Year Net Cash Flow
0 -50000
1 +22000
2 +38000
3 -2000
4 -1000
5 +5000
a) How many number of ROR values is expected and why?
b) Calculate the external rate of return.
c) Is the project economically viable?