NewChem Ltd., a leading chemical manufacturing firm based in Telangana, is evaluating the installation of a new-generation solar power plant to meet…

NewChem Ltd., a leading chemical manufacturing firm based in Telangana, is evaluating the installation of a new-generation solar power plant to meet the energy needs of its primary manufacturing unit. This initiative is part of NewChem's long-term sustainability and cost-reduction goals. The total cost of installing the solar plant is 3.20 crore. Based on the current state electricity tariffs, the plant is projected to generate savings in electricity expenses of 25 lakh per year in perpetuity. However, there is regulatory uncertainty. A new state government is expected to take office in one year and it is anticipated that electricity tariffs will be revised. Based on industry analysis, the annual savings from the solar plant could change to one of two possibilities: Scenario 1 (Low Savings): Savings could decrease to 15 lakh per year in perpetuity. Scenario 2 (High Savings): Savings could increase to 40 lakh per year in perpetuity. The company's Weighted Average Cost of Capital (WACC) is 9.5% and the current risk-free rate of return, based on 10-year government bonds, is 6.5%. From the information given above, choose the correct answer to the Questions No. 4 to 6: