Question
You run a construction firm, you have just won a contract to build a government office building. It will take one year to construct it
You run a construction firm, you have just won a contract to build a government office building. It will take one year to construct it requiring an investment of $10.24 million today and $5. million in one year. The government will pay you $21.50 million upon the buildings completion. Suppose the case flows and their times of payment are certain, and the risk free interest rate is 12%
A. What is the NPV of this opportunity? The NPV of this opportunity is $_______million
B. How can your firm turn NPV into cash today?
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Principles of Managerial Finance
Authors: Chad J. Zutter, Scott B. Smart
15th edition
013447631X, 134476315, 9780134478197 , 978-0134476315
