Question $17(13$ Marks$)$

The Yukon govermment plans to build a turnel under the Yukon River. The new tunnel will provide community benefits that have an estimated net valse of $$1,000,000$ per quarter indefinitely $($which should be taken to mean "forever"$).$ What is the present value of the benefits for this turnel project, if it takes $5$ years to complete the construction and the first $$1,000,000$ benefit will be in exactly $5$ years? Assume that the invested funds can earn $8\%$ compounded quarterly. Draw timelines.

$q,$

$\backslash$table$[[$B$/$E$,$P$/$Y$,$C$/$Y$,$N$,\frac{\text{I}}{Y},$PV$,$PMT$,$FV$],[,,,,,,,],[,,,,,,,],[,,,,,,,]]$

ANSWER:

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