A city council has estimated that it has a surplus of $100 Million (M). The council is exploring the following project, which costs $100 M.

Tax breaks per year to a foreign auto manufacturer for a new auto plant yielding $20M benefit per year from the third year for next 5 years. The benefits are received at the end of each year. Assume that all costs (i.e. tax breaks) are paid equally at the end of year 1 and year 2.

Assuming the discount rate of 5 percent, calculate the following for each of the projects: Discounted Benefits, Discounted Costs, Net Present Value (NPV) and Benefit Cost Ratio (BCR).