Solution

For tax purposes, the net amount to be depreciated is the difference

and with straight line depreciation, 1/ Ndep = 1/5 of this can be deducted from the tax each year. Thus, the annual tax is reduced by

for each of the five years. The present value of this tax reduction is t x fdep x (Ccap - Csah) = 0.40 x 0.6705 x 90 k$ = 24.1 k$

COMMENT

The present value of the reduction would be equal to 5 x 7.2 k$ = 36 k$ if the rd were zero. The discount rate of 15% reduces the present value by almost a third to 0.6705 = fdep.

Solar Stirling Engine Basics Explained

Solar Stirling Engine Basics Explained

The solar Stirling engine is progressively becoming a viable alternative to solar panels for its higher efficiency. Stirling engines might be the best way to harvest the power provided by the sun. This is an easy-to-understand explanation of how Stirling engines work, the different types, and why they are more efficient than steam engines.

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