Table 6.
Discounted cash flow assumptions
| Parameters | Value |
|---|---|
| Plant life | 30 years |
| Discount rate | 10% |
| Financing | 40% equity |
| Loan terms | 10-year loan at 8% APR |
| General plant depreciation | 200% declining balancea |
| General plant recovery period | 7 years |
| Steam plant depreciation | 150% declining balance |
| Steam plant recovery period | 20 years |
| Construction period | 3 years |
| 0-12 months | 8% of project cost |
| 12-24 months | 60% of project cost |
| 24-36 months | 32% of project cost |
| Working capital | 5% of fixed capital investment |
| Start-up time | 3 months |
| Revenues during start-up | 50% |
| Variable costs incurred during start-up | 75% |
| Fixed costs incurred during start-up | 100% |
aDepreciation method is the IRS Modified Accelerated Cost Recovery System (MACRS). APR, annual percentage rate.