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In: Finance

You are considering making a movie. The movie is expected to cost $ 10.5$10.5 million up...

You are considering making a movie. The movie is expected to cost

$ 10.5$10.5

million up front and take a year to produce. After​ that, it is expected to make

$ 4.1$4.1

million in the year it is released and

$ 1.7$1.7

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

10.4 %10.4%​?

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