Bill Clinton reportedly was paid $10 million to write his book My Life. Suppose the book took
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Question:
Bill Clinton reportedly was paid $10 million to write his book My Life. Suppose the book took three years to write. In the time he spent writing, Clinton couldhave been paid to make speeches. Given his popularity, assume that he could earn $8 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10% per year.
What is the NPV of agreeing to write the book (ignoring any royalty payments)? What is the
PV of losing the speaking fees
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