ques 1

QUESTION 1: You run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of $10.4 million today and $4.6 million in one year. The government will pay you $20.6 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