In this assignment you are required to calculate the net present value of a particular project and determine whether it will generate a net contribution to society. The assignment is graded on a pass/fail basis and must be completed on an individual basis.

Government XYZ is considering the addition of a toll road segment to the regional road system. The projected costs and benefits for it have been estimated and converted into monetary units. Furthermore, the discount rate is assumed to be 7%. The resulting data is outlined in the table below.

Based on a benefit-cost analysis, determine whether this pilot project will provide a net contribution to society using the data provided (i.e., will the NPV be positive?). To complete this assignment, complete the following steps (make sure to use the discount factor table when completing this assignment):

Discount each inflow and enter it into the table below, rounded off to the nearest $1.00.

Add the discounted inflow values together and enter the sum of the PVs into the table.

Discount each outflow and enter it into the table below, rounded off to the nearest $1.00.

Add the discounted outflow values together and enter the sum of the PVs into the table.

Determine the net present value (NPV) (i.e., subtract the sum of the present values of costs from the sum of the discounted values of the benefits).

Download the benefit-cost analysis worksheet file, which consists of information similar to the table below and two questions regarding the net present value and the contribution of the project. Your calculations need to be inserted into the worksheet, rounded off to the nearest $1.00.

each inflows and enter them into the table, below, rounded off to the nearest $1.00.

Discount periods		DF			Discounted value of outflows/costs				Discounted values of inflows/benefits
0
1
2
3
4
5
6
Sum of PVs
Time/number of discount periods	Description of Cash Flow			Projected cash outflows			Description of Cash Flows			Projected inflows
0	Initial construction outlay			$11,000,000.00			Tool revenue			0
1				0			Tool revenue			$1,000,000.00
2	Operating outlays			$400,000.00			Tool revenue			$2,000,000.00
3				0			Tool revenue			$2,000,000.00
4	Operating outlays			$460,000.00			Tool revenue			$2,500,000.00
5				0			Tool revenue			$2,500,000.00
6	Operating outlays			$470,000.00			Tool revenue +Salvage			$3,000,000.00