An investment consortium is considering financing a new nuclear power plant. The plant is estimated to have a capacity of 1,000 megawatts and a capital cost of $4.0 billion. The plant has a service life of 30 years and a fixed operating cost of $100 per year. 3.

Before making the commitment to finance the plant, the investors want to explore a scenario in which regulatory delays cause a 5-year delay after it is built but before it is able to power up and sell any electricity.

The investors would lend the utility money at 9 percent annual interest during the delay period. After the 5 years, the plant would still have the same 30-year life and generate the same amount of power with the same operating cost as before.

What would be the levelized cost in dollars per year and in million dollars per year and in dollars per megawatt-hour?

(Note: The annual interest during the delay period is 9 percent of the $4 billion capital cost. The future value of this stream of interest payments with a term of 5 years then has to be added to the $4 billion capital cost to use as the present value for calculating the levelized cost.)