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A renewable energy company is evaluating a project involving a wind farm that is...
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A renewable energy company is evaluating a project involving a wind farm that is expected to generate 6,100 megawatt-hours (MWh) of electricity per year over the next 45 years. The selling price of electricity is $385 per MWh at the end of the first year, and it is expected to increase by 2.5% annually thereafter. If the appropriate discount rate is 7%, what is the present value of the wind farm today? The answer is closest to:
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