10. A colleague and you are discussing the possibility of developing a toll road to bypass several congested interchanges in a metropolitan area. Rough estimates of the projects traffic, tolls and expenses along with assumptions are listed below:

Item Value Development & Construction Costs in Year 1 $30,000,000

Annual Operations & Maintenance Costs starting in Year 2 $400,000

Total Annual Traffic starting in Year 2 750,000 vehicles

Toll Charged starting in Year 2 $4.50

O&M growth rate 3% T

raffic growth rate 2%

Toll growth rate 2%

If the discount rate is 15% and the period of analysis is 10 years, what is the present value of developing this project?