A water distribution agency wants to implement a new treatment facility. The construction period is expected to be 2 years with the project costs at the end of each year being $30 000 000 for year 1 and $40 000 000 for year 2. The service life of the project is 8 years and the expected benefits accruing after project commissioning are $25 000 000 for each of the 8 years. Given that the yearly maintenance cost for the treatment facility is $5 000 000 and the discount rate is 8%,
determine:
(a) The Net Present Value of the project
(b) The Internal Rate of Return for the project.
