Case Study-AW169 Online Services
Fuel Cell Electricity: Project
Fuel cell technology, that found it first major application in the space program, is a growing electricity source for corporations, universities, cities and homes. Reportedly Toyota and Honda (and probably others) are developing fuel cells for use in automobiles. Fuel cells require hydrogen fuel that can be derived from natural or propane gas, and it costs about 50% as much as burning fossil fuels to generate power. Methane emitted from landfill sites is another source of hydrogen and methane causes a stronger greenhouse effect than carbon dioxide. The references below including a video from “60 Minutes” provide more information, although knowledge of this technology is not needed to complete this project.
A company (fictitious), Most Advanced Technology Research (MATR), has its office campus in a large city less than a mile from the city’s massive landfill. The city has asked them if they would be interested in collecting and using the methane gas generated from this landfill to generate their electricity. The city would lease land at no charge for methane collection and fuel cell electricity generation with the condition that the costs that the city now expends to capture and burn the landfill gas be eliminated within five years.
The upfront investment required to build a working facility is estimated by MATR as $3.0 million. All needed hardware is commercially available. Of this $3.0 million investment, $2.5 million can be depreciated using 20-year MACRS (The 20-year and 5-year MACRS rates are in the case data block).
In addition, in both years 5 and 10 an added investment of $150,000 will be needed to replace and expand the gas collection system. These two investments are to be depreciated using 5 year MACRS starting in years 6 and 11 respectively. (recall that there are six years of depreciation in 5-year MACRS).
MATR expects that their electricity needs will be constant at 30,000,000 kWh annually and that all of their electricity needs will be provided by the fuel cell facility starting in year 4. The plan is to have 25% of their year-1 electricity needs provided by the fuel cell technology, 50% of their needs in year 2, 75% in year 3, and 100% in year 4 and following.
The cost per kWh of electricity from present sources is forecast as being $0.050 in year 1, and is expected to increase by 5% annually in every year after year 1. The cost per kWh of electricity from fuel cell generation is forecast as being $0.060 in year 1 and is expected to decrease by 10% annually in every year after year 1.
The gross margin is the savings resulting from implementing the proposal. The basic logic of the gross margin determination is that the revenue is the value of the electricity received at current (no fuel cell) rates. That is, they receive that much value each year. The COGS is the cost of the fuel cell electricity that replaces this.
You can read more about our case study assignment help services here.
How it Works
How It works ?
Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention Case Id mentioned in end of every Q&A Page. You can also send us your details through our email id email@example.com with Case Id in the email body. Case Id is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.
Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to Case Id . The date is asked to provide deadline.
Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id firstname.lastname@example.org and email@example.com must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.
Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.
Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.
Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.
We use best scientific approach to solve case study as recommended and designed by best professors and experts in the World. The approach followed by our experts are given below:
The first step in solving any case study analysis is to define its problem carefully. In order to do this step, our experts read the case two three times so as to define problem carefully and accurately. This step acts as a base and help in building the structure in next steps.
The second step is to define structure to solve the case. Different cases has different requirements and so as the structure. Our experts understand this and follow student;s university guidelines to come out with best structure so that student will receive best mark for the same.
Research and Analysis
This is the most important step which actually defines the strength of any case analysis. In order to provide best case analysis, our experts not only refer case materials but also outside materials if required to come out with best analysis for the case.
Conclusion & Recommendations
A weak conclusion or recommendations spoil the entire case analysis. Our expert know this and always provide good chunks of volume for this part so that instructors will see the effort put by students in arriving at solution so as to provide best mark.
- Physics Assignment Help
- Chemistry Assignment Help
- Engineering Assignment Help
- Psychology Assignment Help
- Online exam Help
- Marketing Assignment Help
- Arts Assignment Help
- Sociology Assignment Help
- Project Management Assignment
- Case Study Help
- Nursing Assignment Help
- Research Assignment Help
- Operations Management Assignment help
- Accounting Assignment Help
- Biology Assignment Help
- Mathematics Assignment Help
- English Assignment Help
- Business Plan Help
- Essay Writing Help
- Human Resource Assignment Help
- Accounting Homework Help
- Computer Science Assignment Help
- Finance Assignment Help
- Economics Assignment Help
- Statistics Homework Help
- Management Assignment Help
- Strategy Management Assignment Help
- Auditing Assignment Help
- Information Management Assignment Help
- Online Assignment Writing help
- Humanities Assignment help
- Taxation Homework Help
- Corporate Finance Assignment Help
- Financial Management Assignment Help
The “no change” cost, the revenue, is the total kWh times the cost per kWh. In year 1 it is $0.05 * 30,000,000 kWh = $1,500,000. This amount changes each year depending of the forecasted cost per kWh.
If the proposal is accepted, the electricity cost of the first three years will be incurred from a combination of both present sources and fuel cell facility. Therefore, the cost is the sum of the cost of “no change” electricity plus the cost of “fuel cell” electricity. This is recorded as the COGS. For year one, it would be
|No Change (proposal not approved)|
|Total Demand KwH||30,000,000|
|Price existing source||$0.050|
|Cost existing source only||$1,500,000|
|Existing Fuel portion|
|Percentage existing source||75%|
|Price existing source||$0.050|
|Fuel Cell portion|
|Percent Fuel Cell source||25%|
|kWh Fuel cell||7,500,000|
|Price of fuel cell source||$0.060|
|Cost combined sources||$450,000|
|Total cost Proposed||$1,575,000|
|Revenue (cost no change)||$1,500,000|
|COGS (cost with change)||($1,575,000)|
In year 1, this revenue of “no change” minus the COGS (fuel cell) yields a gross margin loss of $75,000. The gross margin will become positive when prices change and more fuel cell electricity is used.
The annual expenses for the collection and fuel cell electricity generating facility are $200,000 for Administrative, $175,000 for Maintenance, $45,000 for non-electrical utilities, and $30,000 for insurance and backup coverage. Since there is minimal inventory, sales and purchases, the working capital will be considered $0.00 for all years.
Taxes and Rates
Income will be taxed at 25%, but a energy related tax credit of 30% of the total original investment cost can be deducted from taxes in year 1. The tax credit reduces the total taxes incurred by MATR. The capital gains tax rate is 20%.
Management at MATR has specified that a MARR of 10% be used with a 15-year time horizon.
Ending Asset Values
The only ending assets that would be of value is the investment in the fuel cell technology since there is no working capital and it is not expected to add value to the company and its facilities. It is forecast that the fuel cell technology could be sold in year 16 for $1,000,000, possibly to a local utility company.
product code: Case Study-AW169
Looking for best Case Study-AW169 online ,please click here