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Problem 1: You run a construction firm. You have just won a contract to build a government office building. Building it will require an investment of S10 million today and S5 million in one year. The government will pay you $20 million in one year upon the buildings c cash flows and their times of payment are certain, and the risk-free interest rate is 10%. ompletion. Suppose the a. What is the NPV of this opportunity? b. How can your firm turn this NPV into cash today?
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SEE THE SCREENSHOT. ANY DOUBTS, HAPPY TO HELP YOU. THANK YOU. THUMBS UP PLEASE.

Home nert Page Layout Formulas Data Review View dd-Ins s Cut ta copy ▼ Σ AutoSum Wrap Text в 1 프· ー· 鱼, Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Formsat Sort &Find & 2 ClearFe Select Edting Format Painter Formatting, as Table w styles. ▼ ㆆ ▼ Clipboard Alignment Number Cells DT39 DH DI DJ DK DL DM DN DO DP DR DS DT DU construction firm 36 37 38 39 40 pv factor pv of at 10% cashflow cashflow 0 year 10 1 -10.0000 5 0.9091 -4.5455 20 0.9091 18.1818 42 43 ANS a NPV of this opportunity 3.6364 million 45 46 47 48 49 50 51 52 53 54 (4 トト ANS b Government will pay 20 million after a year The present value of 20 million today 20/(1+0.10) 18.1818 million borrow today 18.1818 million at 10% interest rate out of this, 10 million will be invested today now 5 million required after a year, which has a value today 5/(1+0.10) 4.5455 million 4.5455 so cash today 18.1818 million - 10 million -4.54545 million 3.6364 million MIRR NPV İRR REPLACEMENT S HPR GMAM EAC MACRS LEASE- , RATIOCASHBUDGET / wacc , BOND EPS EBIT REPLACEMENT STats | NPV . BETA LEVERED 9う - - rences: DX15 130% 18-01-2019

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