Question
A movie studio invested $59 million to produce a film. This budget was exhausted in the first year, before the film was completed. It cost
A movie studio invested $59 million to produce a film. This budget was exhausted in the first year, before the film was completed. It cost an additional $15 million in the second year to complete the film. The film generated net returns of $39 million in the third year, $26 million in the fourth year, and went on to generate net returns of $3 million every year from the fifth year for five years.
a. What is the payback period on the film project?
year(s)
month(s)
Round up to the next month
b. Determine whether the film project satisfies the studio's eight-year payback rule.
(click to select)Yes/No
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