You are considering making a movie. The movie is expected to cost $10.6 million up front and take a year to produce. After that, it is expected to make $4.6 million in the year it is released and $1.8 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 10.9%? What is the payback period of this investment? The payback period is years. (Round to one decimal place.) If you require a payback period of two years, will you make the movie?. (Select from the drop-down menu.) Does the movie have positive NPV if the cost of capital is 10.9%? If the cost of capital is 10.9%, the NPV is $ million. (Round to two decimal places.) No Yes You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): What are the IRRs of the two projects? If your discount rate is 4.9%, what are the NPVs of the two projects? Why do IRR and NPV rank the two projects differently? What are the IRRs of the two projects? The IRR for project A is %. (Round to one decimal place.) The IRR for project B is %. (Round to one decimal place.) If your discount rate is 4.9%, what are the NPVs of the two projects? If your discount rate is 4.9%, the NPV for project A is $ million. (Round to two decimal places.) If your discount rate is 4.9%, the NPV for project B is $ million. (Round to two decimal places.) Why do IRR and NPV rank the two projects differently? (Select from the drop-down menus.) NPV and IRR rank the two projects differently because they are measuring different things. (1) is measuring value creation, while (2). is measuring return on investment. Because returns do not scale with different levels of investment, the two measures may give different rankings when the initial investments are different. NPV NPV IRR IRR