Bill Clinton reportedly was paid $15.0 million to write his book MyLife. The book took three...

Bill Clinton reportedly was paid $15.0 million to write his book MyLife. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $8.8 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10.3% per year.

a. What is the NPV of agreeing to write the book (ignoring any royalty payments)?

b. Assume that, once the book is finished, it is expected to generate royalties of $5.2 million in the first year (paid at the end of the year) and these royalties are expected to decrease at a rate of 30% per year in perpetuity. What is the NPV of the book with the royalty payments?

Expert Solution

jeff jeffy answered 1 year ago

Bill Clinton reportedly was paid $15.0 million to write his book My Life. The book took...

Bill Clinton reportedly was paid $15.0 million to write his book My Life. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $8.1 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10.4% per year. a. What is the NPV of agreeing to write the book (ignoring any royalty...

Bill Clinton reportedly was paid $ 15.0 million to write his book My Life. The book...

Bill Clinton reportedly was paid $ 15.0 million to write his book My Life. The book took three years to write. In the time he spent? writing, Clinton could have been paid to make speeches. Given his? popularity, assume that he could earn $ 8.5 million per year? (paid at the end of the? year) speaking instead of writing. Assume his cost of capital is 10.1 % per year. a. What is the NPV of agreeing to write the book?...

Bill Clinton reportedly was paid $ 15.0 million to write his book My Life. The book...

Bill Clinton reportedly was paid $ 15.0 million to write his book My Life. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $ 8.1 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10.4 % per year. a. What is the NPV of agreeing to write the book...

Bill Clinton reportedly was paid $ 15.0 million to write his book My Life. The book...

Bill Clinton reportedly was paid $ 15.0 million to write his book My Life. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $ 8.5 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 9.3 % per year. a. What is the NPV of agreeing to write the book...

Bill Clinton reportedly was paid $15.0 million to write his book My Life.

Bill Clinton reportedly was paid $15.0 million to write his book My Life.The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $8.4 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 9.2% per year.a. What is the NPV of agreeing to write the book (ignoring any royalty payments)?b. Assume...

1. Bill Clinton reportedly was paid $15.0 million to write his book My Life. The book...

1. Bill Clinton reportedly was paid $15.0 million to write his book My Life. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $8.9 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 9.7% per year. a. What is the NPV of agreeing to write the book (ignoring any...

Bill Clinton reportedly was paid $15 million to write his book My Way. The book took...

Bill Clinton reportedly was paid $15 million to write his book My Way. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $8 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10% per year. a. What is the NPV of agreeing to write the book(ignoring any royalty payments)?...

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

Bill Clinton reportedly was paid $10 million to write his book My Life. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $8 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10% per year. a.What is the NPV of agreeing to write the book (ignoring any royalty payments)?...

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

Bill Clinton reportedly was paid 10 million to write his book My Life. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn 8 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10% per year. What is the IRR of agreeing to write the book (ignoring any royalty payments)?...

Bill Clinton reportedly was paid $ 9.7 million to write his book My Life. The book...

Bill Clinton reportedly was paid $ 9.7 million to write his book My Life. The book took three years to write. In the time he spent? writing, Clinton could have been paid to make speeches. Given his? popularity, assume that he could earn $ 8.5 million a year? (paid at the end of the? year) speaking instead of writing. Assume his cost of capital is 9.8 % per year. Assume also that once the book is? finished, it is expected...

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Bill Clinton reportedly was paid $15.0 million to write his book MyLife. The book took three...

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