What is the NPV of this opportunity

Assignment Help Business Management
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

Questions Cloud

Determine value of the us dollar changed against euro : Determine the value of the US dollar changed against the Euro (Euro/US$) in percentage over the last year.
What would be the value of the GIC at the end of the term : Beth invested $2500 in a four-year GIC paying annual interest at a rate of 4.7%, compounded quarterly. What would be the value of the GIC at the end of the term
Why do most investors hold diversified portfolios : Why do most investors hold diversified portfolios? What is covariance, and why is it important in portfolio theory?
Calculate the quality spread differential of swap : Calculate the quality spread differential of this swap. Assuming the principal value of this loan is 5 million USD. How much profit the swap bank could earn?
What is the NPV of this opportunity : What is the NPV of this opportunity? How can your firm turn this NPV into cash? today?
What is the value today : What is the value today, of single payment of $102,395 made 10 years from today, if the value is discounted at a rate of 12.82%?
Describe the venture capital investment in blink : What stage would best describe the venture capital investment in Blink? What is Blink's expected NPV and what will VenFin's decision be?
Each additional transaction : Brenda's bank charges $7.95 per month for up to 20 transactions and $0.60 for each additional transaction. what would be the service charge for the month?
What is her annualized HPR before-tax : What is her annualized HPR before-tax if she reinvests herinvestment income? What is her annualized HPR before-tax if she does not reinvest herinvestment income

Reviews

Write a Review

Business Management Questions & Answers

  Identify the ingredients of leadership process

Select your preferred leader and identify the ingredients of leadership process most suitable in the time of industrial crisis.

  Problems when working with subordinates

Direct supervision is one of best ways for managers to check the behavior of subordinates. But these approaches of behavior control can create problems with subordinates.

  Evaluate the organization external environment

Evaluate the organization external environment. Provide an analysis of the task and general environment. An illustration is recommended

  Explain the importance of human resource management

Explain the importance of human resource management, and describe current issues in managing human resources

  Modulators that exist for modulation of light

Mention types of modulators that exist for modulation of light? Please share some datasheets of the devices too.

  Global management perspective

In global management perspective What do you think you could use in your work-related activities to help?

  Compare and contrast tangible and intangible resources

1. Compare and contrast tangible and intangible resources. 2. Evaluate the two critical assumptions behind the resource-based view.

  Express the types of foreign judgments

Express the types of foreign judgments that will and will not be enforced in the United States. Consider the reasons for these differences.

  Entrepreneurial firms to understand competitive intelligence

What is competitive intelligence and why is it important for entrepreneurial firms to understand competitive intelligence and possibly use it to gain

  Find short definition of quality and share

Find a short definition of quality (cite your source) and share it with the class. How does this definition fit a product or service you have used?

  Central issue driving the lack of repeat business

What do you feel is the central issue driving the lack of repeat business for Rocky Mountaineer? Where in the decision-making process do you think the issue lie

  Identify the stakeholders

Identify the Stakeholders (of intel compmany) Who are the main individuals, groups, or departments affected by the information system?

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