Question

You are considering making a movie. The movie is expected to cost $ 10.8 million up front and take a year to produce. After​ that, it is expected to make $ 4.1 million in the year it is released and $ 2.2 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 10.6 %​? What is the payback period of this​ investment?  

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

If you require a payback period of two​ years, will you make the​ movie? ▼ No Yes . ​(Select from the​ drop-down menu.)

Does the movie have positive NPV if the cost of capital is 10.6 %​? If the cost of capital is 10.6 %​, the NPV is ​$ ____million.​(Round to two decimal​ places.)

Answer 1