1. Herculean Fitness would like to purchase a new set of weight machines for their gym. The new machines would cost $620,000 today. If they purchase the new machines, Herculean Fitness would generate new business and increase their cash flows by $180,000 per year. What is the payback period of purchasing the new machines?

2. Motionfire Films is considering making a drama, a horror, or a comedy film. Due to space limitations at their studio, they will only be able to make one of the three films. Below is the estimates for the NPV, IRR, and the Payback Period of each of the three projects:

Film	NPV	IRR	Payback
Drama	13.7	12%	3.3
Horror	12.9	8%	2.7
Comedy	11.4	12%	3.6

Which film (if any) should Motionfire make?

		Drama
		Horror
		Comedy
		None
		Not enough information to decide