Bill Clinton reportedly was paid

$$$$11\mathrm{.}011\mathrm{.}0$

million to write his book My

Life.

The book took three years to write. In the time he spent$$ writing, Clinton could have been paid to make speeches. Given his$$ popularity, assume that he could earn

$$$$8\mathrm{.}98\mathrm{.}9$

million per year$($paid at the end of the$$ year$)$ speaking instead of writing. Assume his cost of capital is

$9\mathrm{.}5\%9\mathrm{.}5\%$

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 generate royalties of

$$$$4\mathrm{.}84\mathrm{.}8$

million in the first year$($paid at the end of the$$ year$)$ and these royalties are expected to decrease at a rate of

$30\%30\%$

per year in perpetuity. What is the NPV of the book with the royalty$$ payments?

Question content area bottom

Part $1$

a$.$ What is the NPV of agreeing to write the book$($ignoring any royalty$$ payments$)?$

The NPV of agreeing to write the book$($ignoring any royalty$$ payments$)$ is

$$$negative $11,329,27111,329,271.$

$($Round to the nearest$$ dollar.$)$

Part $2$

b$.$ Assume$$ that, once the book is$$ finished, it is expected to generate royalties of

$4\mathrm{.}84\mathrm{.}8$

million in the first year$($paid at the end of the$$ year$)$ and these royalties are expected to decrease at a rate of

$30\%30\%$

per year in perpetuity. What is the NPV of the book with the royalty$$ payments?

The NPV of the book with the royalty payments is

$$$enter your response here.

$($Round to the nearest$$ dollar.$)$

please help me with part b