Baker and Sons specializes in land development and

construction management. It is considering whether

to develop a research park near a major engineering

school. The land will cost $20M, and the design and

construction of the infrastructure will cost $25M.

The plan is to build a new building each year for 15

years at an average cost of $10M. Operating costs for

the buildings will be paid by the tenants. In year 20,

the research park will be sold for $250M (land,

buildings, and goodwill). Tenants will pay 15% of

the cost of the buildings each year in rent. If Baker

and Sons uses an interest rate of 8%, what is the PW

of the research park? (Assume 1 year for infrastruc-

ture construction and 1 year for each building.)