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 S20.O million in one year upon the building's completion. Suppose the interest rate is 10.0%.
Required:
a. What is the NPV of this opportunity?
b. How can your firm turn this NPV into cash today?
Answers: 2
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