Dear Tutor

Please teach me answer of Q4.

Thank you.

Question 4 (12 marks) A public-private pattnership consortium plans to build a combined toll road and rail tunnel under a river. The project will take four years (4) to complete, requiring three payments of $50 million, $75 million and $25 million at the start of each year for the next three (3) years. The tunnel will open for traffic at the beginning of the fifth (5) year. The toll revenue collected is estimated to $25 million per year for the first 10 years of operation, and $35 million for the following 10 years, The govemment owns the tunnel while the private tunnel operator collects the toil, which it will receive from the government at the end of each year, After 20 years of operation, the tunnel will have a zero terminal value. The required return of the project is 12% pa. The company tax rate is zerc a) Calculate the project NPV to the nearest whole dollar. (9 marks). b) Should the project go ahead? Draw a circle around your answer choice below, (1 mark) Yes c) In one short sentence explain your answer choice. (2 marks) END OF PART B 3