Latin American Hydroelectricity Research :: essays papers

Latin American Hydro electricity ResearchFinancial Analysis of Latin America chance The following is an illustration of the financial feasibility of a joint reckon hydro electricity power appoint project in Central America. Estimating the estimated cost of our proposed project, our group chose to use Commonwealth Edison as a comparison. Commonwealth Edison, a subsidiary of Unicom Corp, is utilize as an assessment of our hypothetical costs of providing electricity for Central America. Using Commonwealth Edison we feel provides a good beat of the validity of estimated costs our corporation would incur. Generally Accepted Accounting Principals (GAAP), used by all U.S. corporations, is the highest standard in the world in determine the validity of a corporations financial statements. In the subsequent paragraphs, we give instal costs of the joint venture project. Future growth rates in Central America food market share for electricity go away be projected as well. One of the benefits that our corporation will have in expansion to Central America is a lower cost of capital. A substantially larger pool of investors would provide a larger render of loanable funds. Having a greater selection of borrowers in the international market will reduce the cost of starting our firm in Central America. Portfolio variegation is an opposite advantage that our firm will attain, in regards to foreign investiture in the financing of our project. The projections of the percentage of debt our firm will incur will be discussed in the following paragraphs. In looking at the clean debt to equity ratio (D/E) of hydroelectric firms in the U.S., we feel that a 67% debt / 33% equity structure would be feasible to initially base our firm in Central America. To use a comparison, Commonwealth Edisons plant and equipment assets lend $28.245 billion. Com Ed provides electricity for over 6.5 million residents in Chicago, and other segments of Illinois. The total populat ion of Central America - (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Panama, and Nicaragua) total to 35.5 million. Taking account these statistics, plant and equipments costs for our firm providing the Central American region would cost $154.22 billion. Using this cost estimate, we would finance $103.33 billion though new market issuance in the U.S. 30 -year Treasury market. At a $100,000/ per U.S. Treasury bond face amount, we would need to have retrieve to 1.03 million 30 yr bond contracts, at the prevailing market interest rate of 6.