Digital Plus Novels Inc.(DPN)is a rather successful online publisher focusing on new talents in science fictionnovels. To emphasize on the new talents, it constantly spin off its rights to publish subsequent works by authors within its portfolio. In the beginning of 2020, it is offering to sell the rights to publish subsequent works by a portfolio of 60 'first hit' sci-fi authors under its umbrella (hits identified as 100,000 copies or more @ about $20 price each e-copy). The range of e-copies sold for these 60 authors range from 100,500 e-copies to as high as 900,000 e-copies (few extreme runaway hits) while the average number of e-copies sold is 200,000 e-copies. DPNsets the price to this exclusive right(on 60 sci-fi authors bundled together)as 50million dollars. Virtual Reality Entertainment Plc.(VRE)is a bigger(and rather more diversified) e-publishing company that is considering DPN's proposal. The financial manager of VREhas been gathering the relevant information as follows:-It will take time to work on and publish online the sequel novels of these 60 sci-fi authors. On average, this will lead to the cash flows received at the end of 2022(for simplification). -Out of the whole lot of 60 authors (one author is targeted to produceone novel), it is estimated that only 90% will be able to produce something worth publishing online at the beginning of 2022. Of these publishable works, estimated sales are 200,000 eletronic copies per novel on average. The priceof one e-copy to be sold to customersis about $25, on average. The discount rate used by sci-fie-novel industry is 10%.-For the above to happen, decision needs to be made at the beginning of 2022. To be conservative, VREsecures a conditional offer from its e-production house and platform providerssothat it will cost altogether $291.6 millionfor VREto make and sellthese e-copies (e.g. all costs coveredregardless of the number of e-copiesin the contract).This cost will incur at the beginning of 2022 ONLY if VREdecides to go forward with these sequel e-novels at that pointin time.Also assume that costs(cash flow)will be incurred at the beginning of year 2022(for simplicity) if the decision is made to go on with thepublishingofthis lot of publishable e-novels.-Risk free rate is 4% per year. -Uncertainty in sci-fie-novel industry is quite high. Variance in the sales/returns of these 60 authors as recorded by DPN was 40%. VREbelieves that such estimation will also be valid for the end of 2022. Answer the following questions:1)Calculate the value of rights to publish sequel novels offered by DPN. Should VREbuy it? Please use 'annual compounding' in calculating 'P'. (Use Excel)( 12points)2)One of the natures of risk associated with the e-publishing industry is the ability of authors to deliver publishable (marketable) worksonline. Perform a sensitivity analysis on the value of rights to publish sequel e-novels on this risk factor. You can range the probability to 10% scale (e.g. 0%, 10%, 20%, up to 100%). Interpret the implication ofthese numbers. (Use Excel)( 3points)3)What is the minimum target (% of publishable e-novels, and also in number of e-novels) to push for VREfor these 60 authors to break even? (Use Excel)( 3points