Basil Corporation is planning to buy solar panels that will reduce the amount of electricity bought from the grid. The company's required rate of return for equipment is 8%. The solar panels cost $250,000 and should save about $22,500 per year in electricity costs. The vendor stated that the panels should last 25 years. Ignore taxes and inflation.
a)What is the NPV for this project?
b)Based on the NPV, should Basil make the purchase?
c)What is the payback period?
d)What qualitative factors, including strategic risks, might affect this decision?

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The Answer of Basil Corporation is planning to buy solar panels that will reduce the amount of electricity bought from the grid. The company's required rate of return for equipment is 8%. The solar panels cost $250,000 and should save about $22,500 per year in electricity costs. The vendor stated that the panels should last 25 years. Ignore taxes and inflation.
a)What is the NPV for this project?
b)Based on the NPV, should Basil make the purchase?
c)What is the payback period?
d)What qualitative factors, including strategic risks, might affect this decision?

Basil Corporation Is Planning to Buy Solar Panels That Will