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reportedly was paid $ 9.8 million to write his book The Fork inthe Road. The book took three years to write. In the time he spent?writing, Jack Smith could have been paid to make speeches. Givenhis? popularity, assume that he could earn $ 8.3 million a year?(paid at the end of the? year) speaking instead of writing. If hiscost of capital is 10 % per? year, then the NPV of agreeing towrite the book? (ignoring any royalty? payments) is negative $10,840,872. How many IRRs are there in this? problem? Does the IRRrule give the right answer in this? case? (Note: Consider theupfront payment as a positive cash flow and the opportunity cost ofmissed speaking fees as negative cash? flows.)
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