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Homework: Assignment 2 Financial Decision Making Score: 0 of 1 pt HW Score: 90%, 9 of 10 pts P3-9 (similar to) E Question Help You

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Homework: Assignment 2 Financial Decision Making Score: 0 of 1 pt HW Score: 90%, 9 of 10 pts P3-9 (similar to) E Question Help You run a construction firm. You have just won a contract to build a government office building. It take one year to construct requiring an investment of 1143 and $5.00 in one year. The government wil pay you $24.00 million upon the building's oompletion. Suppose the cash nows and their times of payment are certain, and the risk-free interest rate is 6%. a. What is the NPV of this opportunity? b. How can your firm tum this NPV into cash today? a. What is the NPV of this opportunity? The NPW of this opportunity iss649 million. (Round to two decimal places.) b. How can your firm turn this NPw into cash today? (select from the drop-down menus. The firm can borrow today and pay it back with 6% interest using the it will receive from the government. The frm can use next of th Mer its costs today and save in the bank to eam 6% interest to cover its cost of $11.43 million the firm today. year. This leaves $6.49 million $22.64 million $24.00 million $4.72 million $5.00 million

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