A power company is planning to replace a 30-year-old thermal power generator with a capacity of 200 MW with a new generator with a capacity of 1000 MW. a. If the cost was $300 million 30 years ago and is $1000 million today, what is the implied cost-capacity factor? b. If the cost index 30 years ago was 300, and the cost-capacity factor is 0.8, what is the implied cost index today.

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A power company is planning to replace a 30-year-old thermal power generator with a
capacity of 200 MW with a new generator with a capacity of 1000 MW.
a. If the cost was $300 million 30 years ago and is $1000 million today, what is the
implied cost-capacity factor?
b. If the cost index 30 years ago was 300, and the cost-capacity factor is 0.8, what is the
implied cost index today.

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