General cars ltd has developed a new material which reduces the weight of its engines substantially while maintaining he desired functionalities. This development cost GCL 100M, its expected to reduce their costs.

Cost reductions will grow at 9% p.a over the cost reduction the first year itself. This growth will continue for three more years after end of first year. Later the growth rate will stablize at 3% p.a till perpetuity . GCL believes the above cost reduction will break even their upfront development cost assuming their cost of capital at 14% p.a.

What is GCL cost reduction in first year?