You are consulting for a publishing company that is considering an author's proposal for a new book. The advance and advertising is expected to cost cost

$10.2

million upfront and the book will take a year to write. After that, it is expected to make

$4.5

million in the first year it is published (end of year 2) and

$2.1

million for the following four years (end of years 3 through 6) . What is the payback period of this investment? If you require a payback period of two years, should you publish the book? Does the book proposal have positive NPV if the cost of capital is

10.4%?