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You are considering making a movie. The movie is expected to cost $10.7 million upfront and...

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Finance

You are considering making a movie. The movie is expected tocost $10.7 million upfront and take a year to make. After? that, itis expected to make $4.5 million in the first year it is released?(end of year? 2) and $1.7 million for the following four years?(end of years 3 through? 6) . What is the payback period of this?investment? If you require a payback period of two? years, will youmake the? movie? What is the NPV of the movie if the cost ofcapital is 10.2%??

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3.8 Ratings (409 Votes)
Payback565NPV3112Since the payback is more than 2 years the    See Answer
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You are considering making a movie. The movie is expected tocost $10.7 million upfront and take a year to make. After? that, itis expected to make $4.5 million in the first year it is released?(end of year? 2) and $1.7 million for the following four years?(end of years 3 through? 6) . What is the payback period of this?investment? If you require a payback period of two? years, will youmake the? movie? What is the NPV of the movie if the cost ofcapital is 10.2%??

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