You are considering making a movie. The movie is expected to cost $8.8 million upfront and take

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You are considering making a movie. The movie is expected to cost $8.8 million upfront and take a year to make. After that, it is expected to make $4.3 million in the first year it is released and $2.1 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? What is the NPV of the movie if the cost of capital is 10.6%?

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Corporate Finance The Core

ISBN: 9781292158334

4th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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