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You are considering making a movie. The movie is expected to cost $ 10.3 million upfront and take a year to make. Afterthat, it is

You are considering making a movie. The movie is expected to cost $ 10.3 million upfront and take a year to make. Afterthat, it is expected to make $ 4.1 million in the first year it is released(end of year2) and $ 1.8 million for the following four years(end of years 3 through6) . What is the payback period of thisinvestment? If you require a payback period of twoyears, will you make themovie? What is the NPV of the movie if the cost of capital is 10.5 %? According to the NPVrule, should you make thismovie?

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