Develop a pro forma set of income and cash flow statements for a wind energy plant...

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Accounting

Develop a pro forma set of income and cash flow statements for awind energy plant with the following parameters, and calculate theplant’s NPV, IRR and LCOE:
-Overnight capital costs are $1.2 million, all incurred in Year0. There is no land acquisition cost assumed here.
-The plant has a salvage value of $200,000 at the end of theplant’s life
-Annual revenues from spot market sales are $400,000.
-Annual operating costs are $30,000.
-The plant qualifies for the same 3-Year MACRS schedule that weused in class.
-The plant faces a 34% tax rate
-There are no accounts payable or receivable, but the plant isassumed to have a cash net working capital requirement of $300,000,beginning in Year 0. This working capital can be liquidated at theend of the final year of operation.
-The lifetime of the plant is 5 years
-The discount rate is 20%
-The plant qualifies for a production subsidy of $200,000 peryear for all operating years. A hint here is to model thisproduction subsidy as a revenue source.
-The plant produces 10,000 Megawatt-Hours (MWh) of electricityin each year, Years 1 through 5. (You'll need this to calculateLCOE.)

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Yearly IncomeStatementRevenue 400000Total Inflow 400000Less Cost 30000Net Revenue Before Tax 430000Less Tax 34 146200Profit After Tax 283800Add Subsidy 200000Total Cash Inflow every year 483800Cash Flow StatementYear Particulars PVF20 PV0 Overnight Capital Cost 1200000 1 12000000 Working Capital 300000 1 30000015 Cash See Answer

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