Compute energy needed for 10% ROI

Q: Compute energy needed for 10% ROI

This question evaluates financial modeling and quantitative analysis skills, including ROI calculation, fixed and variable cost accounting, capacity utilization, break-even and sensitivity analysis in an energy project context for a data scientist role.

Q: How do I approach Statistics & Math interview questions?

Statistics & Math questions require understanding of core concepts and practice. PracHub provides solutions with explanations to help you master statistics & math interviews.

Question

A proposed plant must deliver at least a 10% annual ROI on an initial investment of $400M. Annual economics (assume all numbers are annual unless noted): land lease =$ 5M per month; fixed O&M = $25M per year; variable cost =$ 20 per MWh; selling price = $40 per MWh. The plant’s maximum annual capacity is 8.8 million MWh. Compute: (1) the minimum annual MWh that must be generated and sold to achieve the 10% ROI after all operating costs; (2) whether the target is feasible versus the 8.8M MWh capacity; (3) the break-even selling price if the plant runs at full 8.8M MWh; (4) the new required MWh if price drops 10%. Extension: if the average output is constrained to 1,000 MWh/day, quantify the shortfall versus the 10% ROI requirement and propose two levers to close the gap.

Compute energy needed for 10% ROI

Overview

Comments (0)