assume that, once the book is finished, it is expected to generate royalties of 4.8 million in the first year(paid at the end of the year) and these royalties are expected to decrease at a rate 30% per year in perpetuity. what is the NPV of the book with royalty payments

Homework: Chapter 7 Homework Score: 0 of 2 pts 3 of 8 (3 complete) P7-5 (similar to) Bill Clinton reportedly was paid an advance of $10.0 million to write his book My Life. Suppose the book took three years to write. In the time he spent writing, Clinton could have been assume that he could earn $7.7 million a year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 9.6% per year. a. What is the NPV of agreeing to write the book (ignoring any royalty payments)? b. Assume that, once the book is finished, it is expected to generate royalties of $4.8 million in the first year (paid at the end of the year) and these royalties are expected to decrease a NPV of the book with the royalty payments? a. What is the NPV of agreeing to write the book (ignoring any royalty payments)? The NPV of agreeing to write the book is $ - 9.284 million. (Round to three decimal places.) b. Assume that, once the book is finished, it is expected to generate royalties of $4.8 million in the first year (paid at the end of the year) and these royalties are expected to decrease NPV of the book with the royalty payments? The NPV of the book with the royalty payments is $ million. (Round to three decimal places.) w