Question
You run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of 9.5
You run a construction firm.
You have just won a contract to build a government office complex. Building it will require an investment of 9.5 million today and $5.3 million in one year. The government will pay you $20.8 million in one year upon the building's completion. Suppose the interest rate is 10.4% .
a. What is the NPV of this opportunity?
b. How can your firm turn this NPV into cash today?
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Essential Mathematics For Economic Analysis
Authors: Knut Sydsaeter, Peter Hammond, Arne Strom
4th Edition
0273760688, 9780273760689
