🚀 go-pugleaf

Please can you send me the equation that you used.

Thanks
"Bruno Campanini" <BC@gmail.com> wrote in message
news:4617d5ca$0$17946$4fafbaef@reader1.news.tin.it...
> <John@eskom.co.za> wrote in message
> news:ev2gui$3n$1@newsreader02.ops.uunet.co.za...
> > Supose a complany develops a new power plant. The construction cost is
100
> > million $ payable on the 1 January 2008. The current maintenance cost s
> > are
> > 8 million $ per annum plus 2 million $ per 1 million units of
electricity
> > consumed. Assume the quantity of Electrical produced is the same as the
> > quantity consumed. The consumption is 1 million units per annum
beiinning
> > in
> > 2008.
> >
> > Company X borrows the full amount for the construction cost as well as
the
> > the other expenses exceeding the income at a rare of intrest of 5 %per
> > annum. The debt is paid with the income exceeding the expenditure.
Assume
> > all annual costs and income are paid at the end of the year. Ignore any
> > taxes.
> >
> > Calculate the price per unit of Electricity to enable company X to break
> > even over a term of 50 years starting on the 1 of January 2008, assuming
> > the
> > power plant is worthless after 50 years.
>
> Figures are in million $.
> You need 5.48 i.e. (100 * 0.05) / (1 - 1 / (1 + 0.05)^50)
> per annum for paying back 100.
> Then you need 10 every year (8 + 2) for maintenance.
> 5.48 + 10 = 15.48 are due at the end of each year, starting
> Dec. 31, 2008.
> Then you must sell your 1 million units of electricity at 15.48
>
> It is not clear to me what "Company X borrows the full
> amount for the construction cost as well as the
> the other expenses exceeding the income..." really means.
> First income (15.48) occurs with first payments (5.48 + 8 + 2)
> i.e. Dec. 31, 2008 and the two amounts are the same...
>
> Bruno
>