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A solar sea power plant (SSPP) is being considered in a North American location known for its high temperature ocean surface and its much lower ocean temperature 100 meters below the surface. Power can be produced based on this temperature differential. with high costs of fossil fuels, this particular SSPP may be economically attractive to investors. for an initial investment of $100 million, annual net revenues are estimated to be $15 million in year 1-5 and $20 million in years 6-20. assume no residual market value for the SSPP.(5.8)

a) What is the simple payback period for the SSPP?

b) What is the discounted payback period when the MARR is 6% per year?

c) Would you recommend investing in this project?

Microeconomics, Economics

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