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 $10.0
you run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of $10.0 million today and $5.0 million in one year. The government will pay you $20.0 million in one year upon the building's completion. Suppose the interest rate is 10.0%.
a. What is the NPV of this opportunity?
b. How can your firm turn this NPV into cash today?
You have been offered a unique investment opportunity. If you invest $10,000 today, you will receive $500 one year from now, $1,500 two years from now, and $10,000 ten years from now
a. What is the NPV of the opportunity if the cost of capital is 6.0% per year? Should you take the opportunity?
b. What is the NPV of the opportunity if the cost of capital is 2.0% per year? Should you take it now?
Please explain in the financial calculator please (BA II Plus)
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