You run a company that supplies personal protective equipment (PPE) used in hospitals etc. Your company has
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Question:
You run a company that supplies personal protective equipment (PPE) used in hospitals etc. Your company has just sign a deal to deliver PPE to doctor's surgeries, hospitals and test centres. The masks, gowns etc. must be delivered in one year. Your company will need to order $10.68 million worth of equipment today and spend $5.00 million on distribution in one year. Upon delivery of the PPE your company will receive $23.50. The risk-free interest rate is 8% and given the nature of the deal the cashflows are certain.
a. What is the NPV of this opportunity?
b. How can your company transform this NPV into cash now?
Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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