You are considering making a movie. The movie is expected to cost $ 10.6 million up front and take a year to produce. Afterthat, it is expected to make $ 4.4 million in the year it is released and $ 1.7 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 10.6 %?

a.) what is the payback period?

b.) what is the NPV if the cost of capital is 10.6?%