Essay on Answer and Final Project

628 Words May 28th, 2013 3 Pages
Final Project: PowerCo
You are required to submit at the end of the semester a final project in which you will determine whether PowerCo should construct a new generator to meet an expected rise in demand for power. You will arrive at your conclusions by analyzing the data below and answering a series of interrelated questions. You will present your findings and recommenddations in a report, the details of which are listed below in the section
“PowerCo: Your Analysis and Report.”
PowerCo: The Data
Consider the following situation:
PowerCo, a medium‐sized power company, generates and sells electricity throughout several states in the southeast United States.
They have been in business for more than 30 years and are the largest
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The expected profits from the sale of electricity, in millions of dollars: 3. The firm believes that its opportunity cost of capital is 8 percent and so will use that rate to evaluate the project.
PowerCo: Your Analysis and Report
Answer questions 1–5 listed below in the section “PowerCo Analysis
Questions,” analyzing the data presented in the “Data” section. After answering the five questions, you will need to assemble your answers to form your final project, which should be presented in the following way:
 Title page with your name, date, course code, and name of your mentor.  Introduction to your analysis (briefly state your purpose).
The main body of your analysis (i.e., your answers to questions 1–
4, below).
 Recommendations (your answer to question 5, below).
You are not required to follow a particular style of presentation, but whichever one you use, you must be consistent.
When you are ready to send your final project to your mentor, go to the
Submit Assignments section of the course Web site and use the submit function provided for the “Final Project.”
PowerCo Analysis Questions
Your answers to the following questions will form the main body of your case analysis.
1. What is the present value of the expected costs? Show all calculations. 2. What is the present value of the expected after‐tax cash profits?
Show all calculations.
3. What is the expected net present value (the difference between the
PVs of the inflows and

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