BFF2140 - Corporate finance 1 - S1 2022 Lanke Geng 29/03/22 6:52 PM = Homework Post On-line Exercise Week 4 Question 5, Problem 8.9 Part 2 of 2 HW Score: 28.57%, 4 of 14 points O Points: 0 of 1 Save John Howard reportedly was paid $390 000 to write his book Lazarus Rising. The book took three years to write in the time he spent writing, Howard could have been paid to make speeches Given his significance as Australia's second-longest serving Prime Minister, assume that he could eam $320 000 per year (paid at the end of the year) speaking instead of writing. Assume his cost stof capital is 92% per year a. What is the NPV of agreeing to write the book (ignoring any royalty payments)? b. Assume that once the book is finished, it is expected to penerate royales of $220 000 in the first year (paid at the end of the year) and these royalties are expected to decrease at a rate of 30% per year in perpetuity. What is the NPV of the book with the royalty payments? a. The NPV of agreeing to wote the book (ignoring any royalty payments) is S-417135.72. (Round to the nearest dollar) b. The NPV of the book with the royalty payments is s (Round to the nearest dolar)