a.

b.

c.

You run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of $9.6 million today and $4.6 million in one year. The government will pay you $21.7 million in one year upon the building's completion. Suppose the interest rate is 10.7%. a. What is the NPV of this opportunity? b. How can your firm turn this NPV into cash today? a. What is the NPV of this opportunity? The NPV of the proposal is $ million. (Round to two decimal places.) You have been offered a unique investment opportunity. If you invest $11,800 today, you will receive $590 one year from now, $1,770 two years from now, and $11.800 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 6.3% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.3% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 6.3% per year? If the cost of capital is 6.3% per year, the NPV is $. (Round to the nearest cent.) Your factory has been offered a contract to produce a part for a new printer. The contract would last for three years, and your cash flows from the contract would be $4.95 million per year. Your upfront setup costs to be ready to produce the part would be $7.92 million. Your discount rate for this contract is 7.6%. a. What is the IRR? b. The NPV is $4.93 million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule? a. What is the IRR? The IRR is %. (Round to two decimal places.)