Question

2. Deciding whether to buy a Tesla Powerwall (solve in excel)

Tesla sells the Powerwall home battery package for $7050. A homeowner with a time-of-day electric rate could charge such a battery at night (when electricity is inexpensive) and use the electricity during the day (when electricity is expensive). Based on a New England time-of-day rate, and assuming that the full battery storage potential is used 365 days per year, a homeowner could save $788 per year on electricity. If the Tesla Powerwall lasts for 12 years and has no annual maintenance costs, calculate the B/C ratio, net present value, and internal rate of return, and state the conclusion, if:

a. A homeowner’s discount rate is 2%.

b. A homeowner’s discount rate is 10%.

Answer 1