You are working with a consulting company that specializes in total project work, including planning, design and construction. Your client is a turnpike authority that has asked for economic analysis of a proposed highway toll road project. The estimating division of your company has just completed their study and has reported that the project would cost $$137,396,742$ that includes all of the design and construction activities. They also recommended adding $8\%$ to the project cost to cover legal and financing fees for the project. The planning and estimating divisions indicated that the project would take three years before the toll road is open for potential users and the anticipated yearly budget for design and construction activities will be $20\%($year $1),50\%($year $2)$ and $30\%($year $3)$ of the total project budget. Both divisions have also completed a study to estimate the ADT $($average daily traffic$),$ anticipated fees, maintenance and repairs, and operating expenses during the operational period of the project. Below is the result of that study.

Year ADT Fee $($$$/$Veh$)$ Maint. & Repair Operating Exp.

$140,000$ $$1\mathrm{.}25$ $$0$ $$876,000$

$245,000$ $$1\mathrm{.}25$ $$0$ $$876,000$

$355,000$ $$1\mathrm{.}25$ $$0$ $$876,000$

$460,000$ $$1\mathrm{.}50$ $$2,000,000$ $$876,000$

$570,000$ $$1\mathrm{.}50$ $$0$ $$973,000$

$670,000$ $$1\mathrm{.}50$ $$0$ $$973,000$

$770,000$ $$1\mathrm{.}50$ $$6,000,000$ $$973,000$

$870,000$ $$1\mathrm{.}50$ $$0$ $$973,000$

$970,000$ $$1\mathrm{.}50$ $$8,000,000$ $$973,000$

$1070,000$ $$1\mathrm{.}50$ $$0$ $$973,000$

$1.$ Perform a financial analysis of the project based on the above information to determine the rate of return $($i$)$ for the project. $($Calculate i to the nearest two decimal places$).$

$2.$ Perform the same calculations assuming the project has a salvage of $$20,000,000$ at the end of year $10.$

a$.$ Considering that the client wants a $12\%$ return on their investment, is the project economically feasible?

b$.$ Considering the final cost of the project to be $15\%$ over the estimated cost, what would be the equivalent additional annual cost to the client?