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1i) The net present value of an investment to purchase a solar PV system that...

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Finance

1i) The net present value of an investment to purchase a solar PV system that costs $10,000 and saves $2,000 per year for 20 years if your next best investment is the stock markets typical return of 8% per year is about:

a) $9,636

b) $14,555

c) $10,227

d) $12,456

1ii) You estimate that the cost electricity from the utility will increase about 2% per year, and thus your first-year savings of $2,000 will increase 2% per year over the 20 year lifetime of A solar PV system. The net present value of an investment to purchase a solar PV system that costs $10,000 and saves $2,000 in the first year, and escalates at a rate of 2% per year for 20 years, if your next best investment is the stock markets typical return of 8% per year is about:

a) $10,227

b) $8,626

c) $12,706

d) $15,259

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