stankiela
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#1
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#1
Suppose that a dam was built at a very high cost. At the time of construction, the estimated cost energy produced by the dam was £10 per unit. Of these £10, £5 contributed to the amortization of the initial investment and the other £5 to the variable recurrent cost. Now suppose that after the completion of the investment, a new energy source is discovered that allows the production of energy at a cost of £7 per unit. Should the dam be abandoned in favour of the alternative energy source? Please elaborate on your answer.
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Quady
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(Original post by stankiela)
Suppose that a dam was built at a very high cost. At the time of construction, the estimated cost energy produced by the dam was £10 per unit. Of these £10, £5 contributed to the amortization of the initial investment and the other £5 to the variable recurrent cost. Now suppose that after the completion of the investment, a new energy source is discovered that allows the production of energy at a cost of £7 per unit. Should the dam be abandoned in favour of the alternative energy source? Please elaborate on your answer.
What is the investment cost of the new energy source per unit?

What is the discount rate?
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stankiela
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#3
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#3
(Original post by Quady)
What is the investment cost of the new energy source per unit?

What is the discount rate?
I havent been told thats all the information i have
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Quady
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(Original post by stankiela)
I havent been told thats all the information i have
Oh
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Quady
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#5
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(Original post by stankiela)
I havent been told thats all the information i have
Could you ask for the information from your contacts?
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stankiela
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#6
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#6
(Original post by Quady)
Could you ask for the information from your contacts?
unfortunately not
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