1. Type out formula if there is one. 2. do math in excel and show formulas. 
10. You invest $100,000 into the production of a film. You receive $20,000 in royalties for two years, net of tax. In year three you will sell the international distribution rights for $55,000, net of tax, and receive full royalties that year of $20,000. After that, your royalties drop down to $15,000 for five years. At the end of those five years (ie. during year 9) you produce a sequel that costs $200,000. It goes terribly and not only does the sequel make zero money, but your fans label you a sellout and stop renting your movie, so your royalties end immediately (i.e. nothing received in the year of the sequel). While sitting at a bar, you wonder if this was ever a good idea financially. You create a net present value analysis of the above and use a cost of capital of 15%. What is the NPV? For simplicity, assume all cash flows and sequel cost occur at the end of their respective year. 11. An analyst brings you a project. She expects there to be operating cash flow of $500,000 for the first year, and then it will decease by 10% for six more years. You need to contribute $70,000 in net working capital. You will salvage 50% of that back when the project ends in seven years. You need to purchase $1,800,000 of equipment at the beginning and then another $100,000 in year three. No salvage for equipment. You know your company's WACC is 9% and this project is very similar to your company's operations. What is the NPV of this project and should you do it? 12. Your credit card charges you an APR of 13%. What is the actual (i.e. effective) rate you pay? 13. You have $10,000. How long does it take you to quadruple your money assuming you can earn 7%, compounded annually? 10. You invest $100,000 into the production of a film. You receive $20,000 in royalties for two years, net of tax. In year three you will sell the international distribution rights for $55,000, net of tax, and receive full royalties that year of $20,000. After that, your royalties drop down to $15,000 for five years. At the end of those five years (ie. during year 9) you produce a sequel that costs $200,000. It goes terribly and not only does the sequel make zero money, but your fans label you a sellout and stop renting your movie, so your royalties end immediately (i.e. nothing received in the year of the sequel). While sitting at a bar, you wonder if this was ever a good idea financially. You create a net present value analysis of the above and use a cost of capital of 15%. What is the NPV? For simplicity, assume all cash flows and sequel cost occur at the end of their respective year. 11. An analyst brings you a project. She expects there to be operating cash flow of $500,000 for the first year, and then it will decease by 10% for six more years. You need to contribute $70,000 in net working capital. You will salvage 50% of that back when the project ends in seven years. You need to purchase $1,800,000 of equipment at the beginning and then another $100,000 in year three. No salvage for equipment. You know your company's WACC is 9% and this project is very similar to your company's operations. What is the NPV of this project and should you do it? 12. Your credit card charges you an APR of 13%. What is the actual (i.e. effective) rate you pay? 13. You have $10,000. How long does it take you to quadruple your money assuming you can earn 7%, compounded annually
