9.1, What annual payment is needed to amortize a loan of $25 milion at 7.5% interest over a 20-year period? 9.2. A plantis proposing to instal a combinesl heat and power (CHP) system to supply electrical power and process steam, Power is curtently taken from a ullty company, and steam is generated using on-site boilers ‘The capital cost ofthe CHP plant is estimated to be $23 million. CHP is expected to give net savings of $10 million per year. The plant is expected to operate for 10 years after the completion of construction, CCaleulate the cumulative net present value ofthe project ata discount rate of 12% using MACRS depreciation with a 7-year recovery term. Also calculate the discounted cash flow rate of return. ‘Construction will take 2 years, and the capital will be paid in two equal increments, at the end of the first and second years. The savings (income) can be taken as paid at the end of each year. Production will start on the completion of construction.