## You are considering making a movie. The movie is expected to cost \$ 10.6 million upfront and take a year to make. Afterthat, it is expected to make \$...

You are considering making a movie. The movie is expected to cost \$ 10.6

million upfront and take a year to make. Afterthat, it is expected to make \$ 4.7million in the first year it is released(end of year2) and \$ 2.1\$2.1

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 %10.5%?

According to the NPVrule, should you make this movie?  Please show me each step using excel.  This is a sample problem and I need to learn how this is done step by step so that I can do the homework problem.

Thank you

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This question was answered on: Oct 15, 2019

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