Question: Consider the United Studio in Section 22.2. Suppose United has the rights to produce the first film, but has not yet purchased the sequel rights.

Consider the United Studio in Section 22.2. Suppose United has the rights to produce the first film, but has not yet purchased the sequel rights.
a. How much are the sequel rights worth to United?
b. Suppose United can purchase the sequel rights now for $30 million. Alternatively, United can pay $10 million now for the option to buy the sequel rights for $30 million in the future. Which should it choose?

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