A town in Wyoming wants to drill a geothermal well to provide district heating steam and hot water for its businesses an

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A Town In Wyoming Wants To Drill A Geothermal Well To Provide District Heating Steam And Hot Water For Its Businesses An 1 (61.45 KiB) Viewed 15 times

A town in Wyoming wants to drill a geothermal well to provide district heating steam and hot water for its businesses and residences. After government subsidies, the capital investment for the well is $732,000, and the geothermal well will reduce natural gas consumption for steam and hot water production by $60,000 per year. The salvage value of the well is negligible. The simple payback period for this well is 13 years. If the MARR of the town is 5% per year and the life of the geothermal well is 23 years, what is the IRR for this project? Choose the closest answer below. A. The IRR for the project is 6.1% per year. B. The IRR for the project is 7% per year. O C. The IRR for the project is 7.4% per year. O D. The IRR for the project is 3.9% per year.