You run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of $10.1 million today and $5.4 million in one year. The government will pay you $20.3 million in one year upon the? building's completion. Suppose the interest rate is 10.5%.
a. What is the NPV of this?opportunity?
b. How can your firm turn this NPV into cash today?
a. What is the NPV of this opportunity?
The NPV of the proposal is _____ million. ?(Round to two decimal? places.)
b. How can your firm turn this NPV into cash today ?(Select the best choice? below.)
A. The firm can borrow $18.37 million today and pay it back with 10.5% interest using the $20.3 million it will receive from the government.
B. The firm can borrow $15.5 million today and pay it back with 10.5% interest using the $18.37 million it will receive from the government.
C. The firm can borrow $15.5 million today and pay it back with 10.5% interest using the $20.3 million it will receive from the government.
D. The firm can borrow $23.26 million today and pay it back with 10.5% interest using the $20.3 million it will receive from the government.