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ECON131 Quantitative Methods In Economics Business And Finance

tag 0 Download 7 Pages / 1,701 Words tag 20-08-2021

Questions:

You may assume that electricity prices remain constant, and inflation can be ignored. Assume the power generated by the solar panels is the same year-round.

  1. Which is the cheapest solar system type that would provide 50% of the family electricity consumption?
  2. Assuming that the solar system performs as advertised, what is the family’s quarterly bill from its energy provider? Assume there are 91 days in a quarter.
  3. Using an annual discount rate of 5.15% and ignoring inflation, what is the present value of 15 years’ worth of electricity bills?
  4. Other than buying solar panels, what is the quarterly cost of the next best alternative, which still provides 50% renewable energy?
  1. What is the present value of 30 years’ worth of this solution? Again, ignore inflation, and use a discount rate of 5.15%.
  2. Conditional on using at least 50% renewable energy, what is the net present value (NPV) of purchasing the solar panel system named in question (1)? Hint: to answer this question you will need to consider the present value of renewable energy sources and the present value residual electricity bills along with any associated installation costs.
  3. Interpret your result from question (6). Is buying solar panels a good idea? Explain your answer.
  4. Under the same assumptions as above, assume the family is not committed to purchasing renewable energy (i.e. the family is happy with consuming non-renewable energy from the grid.) What is the NPV of purchasing solar panels now?
  5. Will the family in question (8) purchase the solar panel system named in question (1)?
  6. Some governments have offered subsidies to consumers to install solar panels in their homes. Why?
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"ECON131 Quantitative Methods In Economics Business And Finance." My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/econ131-quantitative-methods-in-economics-business-and-finance/solar-panels-investment.html.

My Assignment Help (2021) ECON131 Quantitative Methods In Economics Business And Finance [Online]. Available from: https://myassignmenthelp.com/free-samples/econ131-quantitative-methods-in-economics-business-and-finance/solar-panels-investment.html
[Accessed 02 February 2023].

My Assignment Help. 'ECON131 Quantitative Methods In Economics Business And Finance' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/econ131-quantitative-methods-in-economics-business-and-finance/solar-panels-investment.html> accessed 02 February 2023.

My Assignment Help. ECON131 Quantitative Methods In Economics Business And Finance [Internet]. My Assignment Help. 2021 [cited 02 February 2023]. Available from: https://myassignmenthelp.com/free-samples/econ131-quantitative-methods-in-economics-business-and-finance/solar-panels-investment.html.


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