Question

Conduct the following assessment of a toll road project. The project would require the winning team...

  1. Conduct the following assessment of a toll road project. The project would require the winning team to develop and operate the toll road for 20 years. It is estimated to service an average of 17,000 vehicles per day and will charge $3/vehicle. The capital cost is $125 million and occurs in Year 1 while operating costs are $5 million per year: a) find the NPV of the project if r = 12%, and b) decide whether you should recommend this project as an investment opportunity.

Assume: the toll, average daily traffic and operating costs remain constant.

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