1) There are two possible reasons why Arundel Partners wants to enter the sequel rights business: a. Studios undervalue sequel rights, allowing Arundel to purchase them cheaply. b. Studios are willing to sell sequel rights for low prices in order to get the cash they often desperately need to finance the first film. Discuss why the first reason is unlikely to be a sustainable business model and the second reason is more likely to be sustainable in the long-run.