What is the npv of opportunity

Assignment Help Finance Basics
Reference no: EM131572529

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 $ 10.68$10.68

million today and $5.00 million in one year. The government will pay you $23.50 million upon the? building's completion. Suppose the cash flows and their times of payment are? certain, and the? risk-free interest rate is 11 %11%.

a. What is the NPV of this? opportunity?

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

Reference no: EM131572529

Questions Cloud

Prepare the journal entry for flounder : Prepare the journal entry for Flounder for the sale of the first 92 stations. The cost of each station is $57
Discuss american and french revolutions : Compare the fascist idea of the individual with the idea of individual rights that inspired the American and French Revolutions.
Does europe responsibility for european and world stability : Does Europe have more responsibility for European and world stability. How can we, as individual citizens, work toward a more peaceful, cooperative world
Prepare pronghorns journal entries : Pronghorn, Inc. began work on a $7,579,000 contract in 2017 to construct an office building. Prepare Pronghorn's 2017 journal entries
What is the npv of opportunity : a. What is the NPV of this? opportunity? b. How can your firm turn this NPV into cash? today?
Market price of ethanol does conversion become? attractive : If the cost of conversion is $1.62 per? bushel, at what market price of ethanol does conversion become? attractive?
How did slaves from africa adapt to their new world : How did slaves from Africa adapt to their new world. What kind of unique cultural forms did they produce
Financial position is given by the following data : Lowell Inc. has no debt and its financial position is given by the following data:
Which theory do you believe most closely aligns : Leadership and Organizational Behavior- Which theory do you believe most closely aligns with your current or future approach to motivating employees?

Reviews

Write a Review

Finance Basics Questions & Answers

  Interest rates are currently 6 but you believe the fed is

you own a bond that has a duration of 7 years. interest rates are currently 6 but you believe the fed is about to

  Decision analysis methods under uncertainty

Create an interesting example problem and present a solution for it related to decision analysis methods under uncertainty that you have learned in this course. Your solution should be sufficiently annotated so that any other student in the class ..

  What is the current selling price

Valuation - corporate bond A $1,000 corporate bond with 20 years to maturity pays a coupon of 7% (semi-annual) and the market required rate of return is a) 6.6% b) 13%. What is the current selling price for a) and b)?

  Financial basics to be considered for short term borrowing

What financial basics should be considered when determining the most appropriate amount of short term borrowing

  Vulnerability to current financial threats

Evaluate Exxon's vulnerability to current financial threats such as a recession, higher interest rates, and global competition.

  Impose a tax on imports of products from mexico

President Trump was primarily elected because of his agenda America First. Based on this thesis President Trump has proposed the following:

  Benefits of entrepreneurs conducting market research

What are benefits of entrepreneurs conducting market research? Provide examples of market research strategies used in your current business or one with which you are familiar.

  Describe the overall planning process

Determine what your selected organization would need to take into account when making pricing and service decisions.

  Profit maximization and wealth maximization

What is "agency theory?" How can setting the appropriate goals for the firm minimize the agency problem?  Differentiate between profit maximization and wealth maximization

  Why firms prefer to use accelerated depreciation methods

why are taxes and the tax code important for managerial decision making?

  Calculation of discount rate for cash flows

What is the future value at year 3 of the following set of cash flows if the appropriate discount rate is 11%?

  What is expected return on invested capital eroic why is

what is expected return on invested capital eroic? why is the spread between eroic and wacc so

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd