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Bill Clinton reportedly was paid 10 million to write his book My Life. The book took...

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Finance

Bill Clinton reportedly was paid 10 million to write his book MyLife. The book took three years to write. In the time he spentwriting, Clinton could have been paid to make speeches. Given hispopularity, assume that he could earn 8 million per year (paid atthe end of the year) speaking instead of writing. Assume his costof capital is 10% per year.

What is the IRR of agreeing to write the book (ignoring anyroyalty payments)? Should Clinton agree to write the book (ignoringany royalty payments)? Why?

Answer & Explanation Solved by verified expert
3.7 Ratings (498 Votes)
Internal rate of return is calculated using a financial calculator by inputting the below Press the CF button CF0 10 It is entered with a negative sign since it is a cash outflow Cash flow for each year should be entered    See Answer
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