Find the Net Present Value of the following project. The Cash flows are in constant dollars. The real annual interest rate is 3% and the nominal interest rate is 4%. Given the complexity of the project, it is recommended that the calculations be done in 4 parts: (round to a minimum 4 decimal places within calculations ) (16 marks)

a) The construction costs are $1.50 million per month for five years with the first $1.5 million in one month.

b) There are maintenance costs of $7 million every 5 years with the first $7 million in year 10 and the last $7 million in year 55.

c) There are annual Benefits starting at a value of $3 million in year 6 and growing at a rate of 1% per year with the last benefit in year 60.

d) The terminal value (scrap value) for the project in year 61 of $50 million dollars.

e) What is the Net present value, and should you go ahead with this project? Why or why not? 2