Question
After graduation, you landed a job at a large, multinational media corporation. Your firm has been negotiating a license agreement to use a certain documentary
After graduation, you landed a job at a large, multinational media corporation. Your firm has been negotiating a license agreement to use a certain documentary film for a term of 2.5 years. You expect that the film will return cash flows of $2.5 million at the end of each six-month period. The company licensing the rights to use the film is asking $12.5 million. Both you and your boss LOVE this documentary film and feel that the film should be licensed. Your company's required rate of return is 3.2%/year. Should you purchase the license to show the film? Post your answer with an explanation.
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