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You run a construction firm. You have just won a contract tobuild a government office building. It will take one year toconstruct it requiring an investment of $ 10.23 million today and $5.00 million in one year. The government will pay you $ 22.50million upon the? building's completion. Suppose the cash flows andtheir times of payment are? certain, and the? risk-free interestrate is 8 %. a. What is the NPV of this? opportunity? b. How canyour firm turn this NPV into cash? today?
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