 purpleaces wrote: 
Given the Estimated Profit Potential for cast inflows and Construction and Maintenance Expenses for cash outflows how would I calculate the IRR? I calculated the NPV to be negative $0.60. I'm not sure this is correct, NPV, but if it is how would the IRR be calculated? Further, if anyone calculates the NPV to be a different then $0.60 chime in please. I'm attempting to use an excel IRR function and need help using it
Estimated Profit Potential
Calculations using the current price of electricity and the power calculations for the site indicate that yearâ€“end revenues from the Big Crick River facility (with one turbine on line) will total $190 million in year 1
Preliminary negotiations have begun with the Steerville utilities committee regarding the possible purchase of electricity from the proposed Big Crick River facility. The Steerville committee is interested in purchasing the plant's entire energy production in year 1 in order to supplement its current supply. In addition, there are indications that the town's electricity needs will be growing each year in the forseeable future (see attached newspaper article); again, the committee has indicated that it would like to meet this increased demand through a purchase from the Big Crick River facility. Calculations based on projections of future usage provided by the Steersville utilities committee indicate that profits from this facility will increase at a rate of 5 percent per year. The additional energy supply would be provided by bringing the second turbine online as needed
Construction and Maintenance Expense
Total cost for the construction of the facility, purchase and installation of turbines and generators, and running of necessary external supply cables is estimated at $75 million. This expense is a oneâ€“time, upâ€“front cost. The cost of bringing the second turbine on line is negligible. Annual operating expenses are projected to total $180 million in year 1, resulting in a profit of $10 million for that year
Oh, I'm using an interest rate of 10%, I forgot to supply that information above
Thanks.
