Question

Today a new 6-Mega Watt(MW) solar panel farm is constructed at a cost of $14 million and the cost index is 100. What is the estimated cost for a smaller 3-Mega Watt(MW) solar farm four years from today, knowing that the new cost index is 200 and the cost capacity factor (X) is 0.15? a. $15.5 million b. $19.8 million c. $25.2 million d. $28 million

          Today a new 6-Mega Watt(MW) solar
panel farm is constructed at a cost of
$14 million and the cost index is 100.
What is the estimated cost for a smaller
3-Mega Watt(MW) solar farm four years
from today, knowing that the new cost
index is 200 and the cost capacity factor
(X) is 0.15?
a. $15.5 million
b. $19.8 million
c. $25.2 million
d. $28 million

Today a new 6-Mega Watt(MW) solar
panel farm is constructed at a cost of
14 million and the cost index is 100.
What is the estimated cost for a smaller
3-Mega Watt(MW) solar farm four years
from today, knowing that the new cost
index is 200 and the cost capacity factor
(X) is 0.15?
a.15.5 million
b. 19.8 million
c.25.2 million
d. 28 million

Added by Nathan G.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Prashant Bana

Step 1

The CCF is calculated by dividing the cost index for the new solar farm by the cost index for the original solar farm. CCF = New cost index / Original cost index CCF = 200 / 100 CCF = 2 Show more…

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Today, a new 6-Megawatt (MW) solar panel farm is constructed at a cost of $14 million, and the cost index is 100. What is the estimated cost for a smaller 3-Megawatt (MW) solar farm four years from today, knowing that the new cost index is 200 and the cost capacity factor (X) is 0.15? a. $15.5 million b. $19.8 million c. $25.2 million d. $28 million