PART A$.$

What is the payback period of this$$investment$?$

The payback period is $\_\_$ years $($Round to two decimal$$places$.)$

PART B$.$

If you require a payback period of two$$years$,$ will you make the$$movie$?$

Yes or No

PART C$.$

Does the movie have positive NPV if the cost of capital is

If the cost of capital is $10\mathrm{.}7\%,$ the NPV is $$$$\_\_\_$million $($Round to two decimal$$places$.)$ You are considering making a movie. The movie is expected to cost $$10\mathrm{.}8$ million up front and take a year to produce.

After that, it is expected to make $$4\mathrm{.}1$ million in the year it is released and $$1\mathrm{.}9$ million for the following four years. What

is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does

the movie have positive NPV if the cost of capital is $10\mathrm{.}1\%?$