Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i need help with b) i got 5,889,759 as an answer but its wrong !! help Ba Clinton reportedly was paid $150 million to write

image text in transcribed
i need help with b) i got 5,889,759 as an answer but its wrong !! help
Ba Clinton reportedly was paid $150 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 $83 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10.4% per your 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 generato royalties of 546 million 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. What is the NPV of agreeing to write the book (ignoring any royalty payments)? The NPV ot agreeing to write the book ignoring any royalty payments) is $-5406380 (Round to the nearest dollar) b. Assume that once the book is finished, it is expected to generate royalties of 546 million in the first year (paid at the end of the year and those royalties are expected to decrease at a rate of 30% per year in perpetuty What is the NPV of the book with the royalty payments The NPV of the book with the royalty payments as $(Round to the rest dollar)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The New Public Finance

Authors: Inge Kaul, Pedro Condeicao

1st Edition

0195179978, 978-0195179972

More Books

Students also viewed these Finance questions

Question

6. Identify characteristics of whiteness.

Answered: 1 week ago

Question

9. Explain the relationship between identity and communication.

Answered: 1 week ago