The Eurotunnel Project took 10 years to complcrc, It involved the construction of a twin-bore tunnel with associated infrastructure, rolling stock ("railroad cars"), and terminals. It joined the United Kingdom's rail system with those of France and the rest of continental Europe. pro- vides comfortable, fast, frequent, and reliable rail service that is competitive with air rravcl betwcen London and Paris. The project Was technically straightforward an engineering standpoint. IL was initially expected to cost E4.8 billion (E stands for British pounds). T be cost estimate was later increased to 6.0 billion. This construction cost was spread more or lcss evenly over eight years. Thc spu'n- sors raised E 1.0 billion Of equity and {5.0 billion of debt. Most of the debt was floating rate (the rate is reset regularly to current market rates). In return for building the project, the sponsors received authority to opcrarc it for 48 years. They would receive all Che revenues and pay a]] thc costs. At thc end, the governments OF Great Britain and France would become thc owners without any further compensation to the project sponsors. This table provides project projections. For years not listed, assume each item increases by equal annual amounts bctwcen the years given. The tax rate is 40%_ Using an 8% cost of capital and assuming the 6 billion construction cost is spread evenly cwer rhe eight years of construction, calculate thc and CASH FLOW PROJECTIONS FOR THE EUROTUNNEL PROJECI' (MILLIONS OF BRITISH POUNDS) S%uttle Total Operating Costs: Vat Total Operating Costs Interest, net profit profit after taxes L.384 314 64 762 143 158 331 108 90 423 835 63 159 322 463 368 77 908 99 160 307 273 1220 E505 396 85 986 107 162 291 430 91 1,072 117 206 167 277 422 E334 439 1,158 126 216 265 508 198 652 493 1,254 137 235 234 140 [374 [709 330 1,356 148 253 212 716 279 070 569 127 1,466 116 176 823 321 10 eg36 612 586 130 304 927 361 E 566 20 El,763 1,191 282 3,236 314 317 631 234 2,410 934 c.',476 2,105 552 6,184 562 64S 1,207 4,879 1,893 2.CJb6 40 {6,682 3,611 1.033 11,356 1,006 1 240 2.246 9,152 3,547 48 110.650 5,326 17.824 1.604 2 coo 3604 14.453 5,573 [8,880