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Metflix is considering developing a long-term project of filming a nature documentary series. Filming will take 5 years and the cost is $33,500 per year
Metflix is considering developing a long-term project of filming a nature documentary series. Filming will take 5 years and the cost is $33,500 per year at the end of each year. Once filming is done after 5 years, the series is expected to make $70, 400 per year for 6 years. The cash inflows begin at the end of year 6. Assuming the cost of capital is 15.3%. a) The NPV of this project is $ [2 Marks] (Round to the nearest dollar.) b) The company should accept this project. (Select the best choice below.) [1 Marks] (No answer given) c) The IRR of this project is %. (Round to two decimal places in % term.) [2 Marks] Note: The IRR for this question will require Excel or a financial calculator. d) If the cost of capital is 15.3%, the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged is two decimal places.) %. (Round to
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