Question
The government of Ghana is to construct a new 60km highway asphalt road from Accra to Winneba. The road is to be constructed just 200
The government of Ghana is to construct a new 60km highway asphalt road from Accra to Winneba. The road is to be constructed just 200 meters away from the coast line in order to ensure coast-to-coast ride that is devoid of any traffic. The asphalt road will take 2 years to construct and cost a total of $285 million at the end of the construction period. The asphalt surface will last 10 years and cost $250,000 per year in regular maintenance. In addition, there will be major repair works in years 3, 6, and 9 after the construction of the road at a cost of $50,000, $55,000, and $60,000 respectively. Given this information, the Net Present Value (NPV) of the road project if the government of Ghana uses a discount rate of 8% per year for road projects is $
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