Financial Analysis - Yardsticks of Economic Merit
Description
Apart from the initial investment, there are annual cash inflows and outflows associated with the project throughout its life span.
The Net Present Value (NPV) is the net value of all benefits (cash inflows) and costs (cash outflows) of the project, discounted back to the beginning of the investment. The benefits will essentially include the income from sale of electricity generated.
Benefit Cost Ratio (BCR) is the ratio of the accumulated present value of all the benefits to the accumulated present value of all costs, including the initial investment.
Payback Period (PBP) is the year in which the net present value of all costs equals with the net present value of all benefits. Hence PBP indicates the minimum perios over which the investment for the project is recovered.
Internal Rate of Return (IRR) is the maximum rate of interest (in real terms) that the investment can earn. In physical sense, it is the interest rate upto which we can afford to arrange the capital for the project.
The Net Present Value (NPV) is the net value of all benefits (cash inflows) and costs (cash outflows) of the project, discounted back to the beginning of the investment. The benefits will essentially include the income from sale of electricity generated.
Benefit Cost Ratio (BCR) is the ratio of the accumulated present value of all the benefits to the accumulated present value of all costs, including the initial investment.
Payback Period (PBP) is the year in which the net present value of all costs equals with the net present value of all benefits. Hence PBP indicates the minimum perios over which the investment for the project is recovered.
Internal Rate of Return (IRR) is the maximum rate of interest (in real terms) that the investment can earn. In physical sense, it is the interest rate upto which we can afford to arrange the capital for the project.
Input: Turbine Rated Power, PR Capacity Factor, CF Capital Investment Electricity Sold Rate Annual Operation and maintainance cost Discount Rate, i Life Period, n Output: Net present value of the project, NPV Benefit cost ratio, BCR Payback period of the investment, n
Financial Analysis of Wind Turbine - Yardsticks of Economic Merit
Calculator Output
Net present value of the project is, NPV = $ 2365311 TK
Benefit cost ratio, BCR = 1.84
Payback period of the investment is, n = 8.5 year(s)