You run a construction firm. You have just won a contract to build a government office building. Building it will require an investment of $10 million today, and $5 million in one year. The government will pay you $20 million in one year upon completion. Suppose the cash flows and their time are certain, and the interest rate is 10%. What is the NPV of this opportunity?

Ivy's Ice Cream is looking at an opportunity that would require an investment of $900,000 today.  The investment will provide cash flows of $250,000 in the first year, $400,000 in the second year, and $600,000 in the third year.   If the interest rate is 8%, what is the NPV of this investment opportunity?  Should Ivy's Ice Cream move forward with this investment based on the NPV? (Round your answer to the nearest whole dollar.)

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You run a construction firm. You have just won a contract to build a government office complex. Building it will require an investment of $10.1010.10 million today and $5.105.10 million in one year. The government will pay you $21.2021.20 million in one year upon the building's completion. Suppose the interest rate is 10.2 % 10.2 %. a. What is the NPV of this opportunity? b. How can your firm turn this NPV into cash today?

You are considering making a movie. The movie is expected to cost $10.1 million up front and take a year to produce. After that, it is expected to make $4.7 million in the year it is released and $1.5 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10.1%? What is the payback period of this investment? The payback period is years. (Round to two decimal places.)

You are planning to produce a new action figure called "Nia." However, you are very uncertain about the demand for the product. If it is a hit, you will have net cash flows of $80 million per year for three years (starting next year [i.e., at t = 1]). If it fails, you will only have net cash flows of $40 million per year for two years (also starting next year). There is an equal chance that it will be a hit or failure (probability = 50 percent). You will not know whether it is a hit or a failure until the first year's cash flows are in (i.e., at t = 1). You must spend $140 million immediately for equipment and the rights to produce the figure. If you can sell your equipment for $90 million once the first year's cash flows are received, calculate the value of the abandonment option. (The discount rate is 10 percent.) Multiple Choice $24.38 $18.56 -$5.82 $0.00

You are considering opening a new plant. The plant will cost $102.6 million up front and will take one year to build. After that it is expected to produce profits of $30.9 million at the end of every year of production (starting two years from now). The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 8.8%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. The NPV of the project will be $ million. (Round to one decimal place.) make the investment. (Select from the drop-down menu.) You The IRR is%. (Round to two decimal places.) The maximum deviation allowable in the cost of capital estimate is %. (Round to two decimal places.)