Question: last time someone gave the wrong answer please be careful! You are considering making a movie. The movie is expected to cost 10.2 million up
last time someone gave the wrong answer please be careful!
You are considering making a movie. The movie is expected to cost 10.2 million up front and take a year to make. After that, it is expected to make 4.6 million in the year it is released and 1.8 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10.4% ?
Question content area bottom
Part 1
What is the payback period of this investment?
The payback period is 5.1 years. (Round to one decimal place.)
Part 2
If you require a payback period of two years, will you make the movie? No .
Part 3
Does the movie have positive NPV if the cost of capital is 10.4% ?
If the cost of capital is 10.4% , the NPV is $ _ million. (Round to two decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
