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//Variable declaration:
TCC_TB = 2500000 //Total capital cost ($)
R_TB = 3600000 //R_TBevenue generated from the facility ($)
AOC_TB = 1200000 //Annual operating costs ($)
TCC_FB = 3500000 //Total capital cost ($)
R_FB = 5300000 //R_TBevenue generated from the facility ($)
AOC_FB = 1400000 //Annual operating costs ($)
n = 10 //Time of facility (yr)
//Calculation:
D = 0.1*TCC_TB //Depriciation ($)
WC = 0.1*TCC_TB //Working capital ($)
TI = R_TB-AOC_TB-D //Taxable income ($)
IT = 0.5*TI //Income tax to be paid ($)
A = R_TB-AOC_TB-IT //After-tax cash flow ($)
function [ans] = eqTB(i)
x = (((1+i)**n-1)/(i*(1+i)**n))*A + (1/(1+i)**n)*WC //Equation for computing rate of return for TB unit
y = WC + 0.5*TCC_TB + 0.5*TCC_TB*(1+i)**1 //Equation for computing rate of return for TB unit
ans = x-y
endfunction
iTB = ceil(fsolve(0.8,eqTB)*100) //Rate of return for TB unit (%)
D = 0.1*TCC_FB //Depriciation ($)
WC = 0.1*TCC_FB //Working capital ($)
TI = R_FB-AOC_FB-D //Taxable income ($)
IT = 0.5*TI //Income tax to be paid ($)
A = R_FB-AOC_FB-IT //After-tax cash flow ($)
function [ans] = eqFB(i)
x = (((1+i)**n-1)/(i*(1+i)**n))*A + (1/(1+i)**n)*WC //Equation for computing rate of return for FB unit
y = WC + 0.5*TCC_FB + 0.5*TCC_FB*(1+i)**1 //Equation for computing rate of return for FB unit
ans = x-y
endfunction
iFB = fsolve(0.8,eqFB)*100 //Rate of return for FB unit (%)
//Results:
printf("The rate of return for TB unit is: %.0f %%",iTB)
printf("The rate of return for FB unit is: %.1f %%",iFB)
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