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You run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of $
You run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of $ 10.5
$10.5 million today and $ 4.6
$4.6 million in one year. The government will pay you $ 20.1
$20.1 million in one year upon thebuilding's completion. Suppose the interest rate is 10.9 %
10.9%.
a. What is the NPV of thisopportunity?
b. How can your firm turn this NPV into cashtoday?
a. What is the NPV of thisopportunity?
The NPV of the proposal is $
million.(Round to two decimalplaces.)
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