A publisher is offering to pay you $1 million to produce a book. The book will take
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Question:
A publisher is offering to pay you $1 million to produce a book. The book will take you three years to write. In the time you spend writing the book, you could have been paid $450K per year (paid at the end of the year) working instead of writing. Assume your cost of capital is 8% per year. Ignoring any future royalty payments,would you accept the deal?
Explain how you calculate your answer and justify the method you used to answer this question.
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