You are considering making a movie. The movie is expected to cost $10.2 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 $1.7 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 10.5%?

A) What is the payback period of this investment?

The payback period is ______ years. (round the tenth)

B) If you require a payback period of two years, will you make the movie? Yes/No

C) Does the movie have positive NPV if the cost of capital is 10.5%? If the cost of capital is 10.5%, the NPV is _________ million (round to hundreth)