Evaluate ROI and payback for renewables

You’re advising NorthGrid Energy on a utility-scale renewables investment with the following Year-1 economics unless noted: upfront capex = $50,000,000; fixed O&M = $2,000,000/year; variable cost = $28/MWh; contracted price (PPA) = $40/MWh for the first 5 years; maximum physical capacity = 800,000 MWh/year. Define Year-1 ROI as (operating profit in Year 1) / (initial capex). Ignore taxes, depreciation, financing costs, and working capital. Answer all parts, showing formulas and numeric steps: 1) What quantitative factors would you prioritize before modeling (at least 6), and for each state directionality (how an increase affects ROI) and how you would measure/validate it? 2) Compute the minimum annual MWh required in Year 1 to achieve a 10% ROI. If the requirement exceeds capacity, quantify the shortfall in MWh. 3) Suppose regulation caps Year-1 output at 500,000 MWh. a) Holding costs constant, what PPA price (to the nearest cent) is needed to still reach a 10% ROI? b) Holding price at $40/MWh, what maximum variable cost per MWh (to the nearest cent) would still yield a 10% ROI? 4) Compare two mutually exclusive build options with independent economics: Option A (Solar): capex $25,000,000; fixed O&M $2,000,000/year; variable cost $0/MWh; expected output 300,000 MWh/year at $40/MWh. Option B (Biomass): capex $25,000,000; fixed O&M $1,000,000/year; variable cost $30/MWh; expected output 1,100,000 MWh/year at $40/MWh. For each option, compute: a) Year-1 operating profit, b) simple payback period (years), and c) unit margin ($/MWh). 5) Which option would you recommend and why? Justify using unit economics, sensitivity to price/cost shocks, capacity risk, and operational complexity. 6) Deliver a 30-second executive summary (≤90 words) stating the recommendation, key assumptions, and the single largest risk.