Investing in a hydropower plant with 5 MW power costs 3,500,000 euro . 1,300,000 euro will be invested by the investor while the rest of the World Bank loans with interest of 9 %.
Contract Build Operate and Transfer is ( 30 years ) with the Kosovo government . For operation Hydropower wage worker needed 10 80,000 EUR while maintenance costs are 2.5 % of total investment. Investor generates revenues that are 1.4 cents per 1 kw / h to KEDS sale . Income and expenses are increased for 10 % . Return on investment bonds Kosovo Government treasuries is 7 %. Corporate tax is 10 %.
Table 1: Return on investment of the project and return on investment in the hydropower market Return on investment of the project Return on investment in the hydropower market
|
Return on investment of the project
|
Return on investment in the hydropower market
|
|
0.0214
|
0.0295
|
|
0.0195
|
0.0514
|
|
-0.0165
|
0.0418
|
|
-0.0175
|
0.0389
|
|
0.0292
|
0.0285
|
|
0.0165
|
0.0196
|
|
0.0282
|
0.0319
|
|
-0.0192
|
0.0275
|
|
0.0469
|
0.0284
|
|
0.0315
|
0.0195
|
1. Find WACC?
2. Find NPV and IRR?
3. Develop sensitivity analysis if the difference between the scenarios is 15 %?
4. Develop a feasibility analysis for this project?
5. Develop stakeholder analysis (stakeholder analysis ) for this project?
6. Indicate who is responsible for issuing the relevant permits?
NOTE: Please do this exam with excel and use the formulas on the exam.