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Present value and the npv decision rule

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Reference no: EM131819623

Present Value and the NPV Decision Rule

You run a construction firm. You have just won a contract to construct a government office building. It will take one year to construct it, requiring an investment of $10 million today and $5 million in one year. The government will pay you $20 million upon the building's completion. Suppose the cash flows and their times of payment are certain, and the risk-free interest rate is 10%.

a. What is the NPV of this opportunity?

b. How can your firm turn this NPV into cash today?

Can someone please show me how to answer this question using excel.

Reference no: EM131819623

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