Computation of payback period and npv

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Reference no: EM1314190

Computation of payback period and NPV

The movie is expected to cost $10 million upfront and take a year to make. After that, it is expected to make $5 million in the year it is released and $2 million for the following four years. What is the payback period of this investment? If your esquire a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10%?

Reference no: EM1314190

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