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Part $1$

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\mathrm{.}6310\mathrm{.}63$

million today and

$$$$4\mathrm{.}324\mathrm{.}32$

million in one year. The government will pay you

$ $20\mathrm{.}02$$$20\mathrm{.}02$

million upon the$$ building's completion. Suppose the cash flows and their times of payment are$$ certain, and the$$ risk$-$free interest rate is

$8\%8\%.$

a$.$ What is the NPV of this$$ opportunity?

b$.$ How can your firm turn this NPV into cash$$ today?