Energy Project Financing : Resources and Strategies for Success

228 Energy Project Financing: Resources and Strategies for Success The value of IRR is typically determined through a trial and ...

Appendix A 229 Decision Rule: If IRR is unique and IRR ≥MARR, then the investment is attractive. Example 15 Reconsider the therm ...

230 Energy Project Financing: Resources and Strategies for Success Decision: IRR≥MARR (20%>15%); therefore, the window invest ...

Appendix A 231 ΣRtP|F,i,t t = 0 n ΣCtP|F,i,t t = 0 n ≥^1 which is the decision rule for SIR. The SIR represents the ratio of the ...

232 Energy Project Financing: Resources and Strategies for Success 2525*(P|A, 15%,3) + 3840*(P|A, 15%,3)*(P|F, 15%,3) SIR = ———— ...

Appendix A 233 Calculation Approach: PBP = the smallermsuch that AΣ t≥C 0 t = 1 m Decision Rule: If PBP is less than or equal to ...

234 Energy Project Financing: Resources and Strategies for Success Figure A-8. Two investments evaluated using payback period is ...

Appendix A 235 posed projects, (2) there are no mutually exclusive projects, and (3) there are no contingent projects. A funds r ...

236 Energy Project Financing: Resources and Strategies for Success Figure A-9 Four investments projects PWC = –400+120*(P|A,12%, ...

Appendix A 237 Table A-7. The decision alternatives from four projects ———————————————————————— Accept A only Accept B only Acce ...

238 Energy Project Financing: Resources and Strategies for Success one, and only one, will be selected as the best (optimal) dec ...

Appendix A 239 Table A-8. The decision alternatives with constraints imposed Accept A only OK Accept B only infeasible, B contin ...

240 Energy Project Financing: Resources and Strategies for Success PWA = –1000 + 600*(P|A,12%,4) = –1000 + 600 (3.0373) = $822.3 ...

Appendix A 241 A.8.4 Some Interesting Observations Regarding Constrained Analysis Several interesting observations can be made r ...

242 Energy Project Financing: Resources and Strategies for Success large as the number of potential projects increases. The miti ...

Appendix A 243 is greater than or less than the life of at least one other project. This situation did not occur in Example 17 o ...

244 Energy Project Financing: Resources and Strategies for Success Example 19 Determine the longest life planning horizon for pr ...

Appendix A 245 planning horizon is based on company policies or practices. The standard horizon may require repetition and/or tr ...

246 Energy Project Financing: Resources and Strategies for Success of the exact values and interpolation. The best and theoretic ...

Appendix A 247 The interpolation proceeds by setting up ratios and solving for the unknown value, (F|P,13%,7), as follows: chang ...