What is the NPV of this opportunity

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Reference no: EM133495845

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 $10.21 million today and $5.00 million in one year. The government will pay you $24.50 million upon the building's completion. Suppose the cash flows and their times of payment are certain, and the risk-free interest rate is 7%.

1. What is the NPV of this opportunity? 

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

Reference no: EM133495845

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