Analysis
Capital Budgeting for a Solar Farm Expansion
Overview
What this challenge is about.
Your task is to build a project finance model that estimates unlevered and levered free cash flows over 25 years (the project's life). Incorporate the 30% Investment Tax Credit (ITC), depreciation (MACRS), and a debt-to-equity ratio of 60/40. Calculate NPV, IRR, and payback period under base case and two stress scenarios (lower irradiance, higher O&M costs). Deliver a 2-page memo with a recommendation and a one-page appendix showing key metrics. Success means providing a robust analysis that clearly communicates the project's financial viability and risks.
The Brief
What you'll do, and what you'll demonstrate.
Evaluate whether the $50 million solar farm expansion generates sufficient returns to justify the investment, considering tax credits, debt financing, and operational risks.
Earning criteria — what you'll demonstrate
- Apply NPV, IRR, and payback period to a capital budgeting decision
- Incorporate tax shields from depreciation and investment tax credits
- Model the impact of debt financing on project returns
- Conduct scenario analysis to assess project risk
Program Fit
Where this fits in your program.
Sharpens the same skills your degree expects you to demonstrate.
Skills
Skills you'll demonstrate.
Each one shows up on your verified credential.
Careers
Roles this prepares you for.
Real titles. Real skill bridges. Pick the one closest to your trajectory.
Career mappings coming soon.