You are getting ready to start a new project that will incur some cleanup and shutdown costs when it is completed. The project costs $5.34 million up front and is expected to generate $1.12 million per year for 10 years and then have some shutdown costs at the end of year 11. Use the MIRR approach to find the maximum shutdown costs you could incur and still meet your cost of capital of 14.8% on this project.

The maximum shutdown costs allowable to still have a positive NPV is $. ____ (Round to the nearest dollar.)

You are considering making a movie. The movie is expected to cost $10.2 million up front and take a year to produce. After that, it is expected to make $4.2 million in the year it is released and $1.6 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 10.9%?

What is the payback period of this investment?

The payback period is _____ years.(Round to one decimal place.)