What is the payback period of investment

Assignment Help Financial Management
Reference no: EM131861437

You are considering making a movie. The movie is expected to cost $ 10.8 million up front and take a year to produce. After? that, it is expected to make $ 4.5 million in the year it is released and $ 1.9 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 10.4 %?

Reference no: EM131861437

Questions Cloud

Define implementation of knowledge management processes : Critically analyse how different views of knowledge in an organisation might influence the design and implementation of knowledge management processes.
What role does technology play in design of work systems : What are the critical factors to consider in the design of work system? What particular role does the technology play in the design of work systems?
Compute the YTM and YTC : If the firm has the right to call it back after16 years at par plus half a year’s coupon. Compute the YTM and the YTC. Which will the investor attain?
How does user acceptance criteria help us complete project : A critical item for project management is to know when you are done. How does the User Acceptance Criteria help us complete the project?
What is the payback period of investment : What is the payback period of this? investment? If you require a payback period of two? years, will you make the? movie?
Portfolio on expected return-standard deviation diagram : Draw the CML for the passive portfolio and the CAL for your active portfolio on an expected return-standard deviation diagram.
What is their yield to call : Atlantis Fisheries has issued a zero coupon bond at a price of $410 per bond. what is their yield to call?
Surrounded by forest for the purpose of growing timber : Suppose you are considering purchasing bare land today that is surrounded by forest for the purpose of growing timber and harvesting in 50 years.
Compute the anticipated break-even sales : Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.

Reviews

Write a Review

Financial Management Questions & Answers

  Contribution margin ratio-break-even point

Ritz Furniture has a contribution margin ratio of 0.10. If fixed costs are $176,500, how many dollars of revenue must the company generate in order to reach the break-even point?

  Expect return on equity to be constant rate

Suppose investors in Proctor and Gamble have a 7% cost of equity. Based on Analysts’ forecasts you expect Proctor and Gamble to have earnings per share of $3.80 in one year and earnings per share of $4.20 in two years. After two years you expect retu..

  What is the npv per engine purchased on credit

Air Spares is a wholesaler that stocks engine components and test equipment for the commercial aircraft industry. What is NPV per engine purchased on credit?

  Assume incremental net income to be considered

Teardrop, Inc., wishes to expand its facilities. The company currently has 12 million shares outstanding and no debt. The stock sells for $22 per share, but the book value per share is $33. Calculate the new book value per share. Assume no change is ..

  What is yield to maturity of the bond

A municipal bond with a coupon rate of 4.40 percent sells for $4,830 and has eight years until maturity. What is the yield to maturity of the bond?

  What is the amount to use as the annual sales figure

Winnebagel Corp. currently sells 23,000 motor homes per year at $61,000 each, and 8,500 luxury motor coaches per year at $98,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 18,000 of these..

  Using the free cash flow method of valuation

Using the free cash flow method of valuation, an analyst determines the value of Company A's stock to be $12 and the value of Company B's stock to be $15. Other things be held constant, what could account for the higher valuation for Company B?

  Including interest expense and interest tax shield

Braxton Enterprises currently has debt of $30 million and an interest rate of 10%. Braxton plans to reduce its debt by repaying $6 million in principal at the end of each year for the next five years. If Braxton's marginal corporate tax rate is 30%, ..

  What is the expected return and the standard deviation

Stock X and Stock Z both have an expected return of 12%. What is the expected return and the standard deviation of a portfolio that includes 50% Stock X and 50%

  Sale of security are the funds actually received from sale

The ____ from the sale of a security are the funds actually received from the sale after____.

  What is the percentage change in price of these bonds

Laurel, Inc., and Hardy Corp. both have 9 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has four years to maturity, whereas the Hardy Corp. bond has 15 years to maturity...

  Deposit the present value-investment account

Bill O'Blarney tells you that he plans to give you $1 million as a birthday present on your 75th birthday. You are now 25—and a bit skeptical. You suggest that he deposit the present value of this nice gift today in an investment account for you. If ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd