You are considering making a movie. The movie is expected to cost $10.2 million up front and take a year to make. After that, it is expected to make $4.3 million in the year it is released and $1.9 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 10.3%?

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Part 1

What is the payback period of this investment?

The payback period is_ years. (Round to one decimal place.)

Part 2

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

YES/ NO

. (Select from the drop-down menu.)

Part 3

Does the movie have positive NPV if the cost of capital is 10.3%?

If the cost of capital is 10.3%, the NPV is

$_million. (Round to two decimal places.)