What is the payback period of this investment

Assignment Help Financial Management
Reference no: EM132008781

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 $ 4.6 million in the year it is released and $ 2.1 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 10.3 %. What is the payback period of this investment ?

Reference no: EM132008781

Questions Cloud

Dividends are anticipated to maintain growth rate : The dividends are anticipated to maintain a growth rate of 2.50 percent, forever. If the stock currently sells for $50.30 per share, what is the required return
Manufacture new efficient fuel injection system : A new company, KarTeX Inc, was recently founded to manufacture a new efficient fuel injection system.
Should you buy or lease the car : After deciding to get a new car, you can either lease the car or purchase it with a three-year loan. Should you buy or lease the car?
Repaid next year to finance project at the risk-free rate : Can Guerin obtain a $100 loan to be repaid next year to finance the project at the risk-free rate? Suppose the bank has a monopoly on providing financing.
What is the payback period of this investment : Does the movie have positive NPV if the cost of capital is 10.3 %. What is the payback period of this investment ?
Which investment has the higher IRR : Which investment has the higher IRR ? Which investment has the higher NPV when the cost of capital is 6.4 %?
What would be the disadvantage from not matching : What would be an example of this occurring in business today and what would be the disadvantage from not matching?
What is the investment value of the convertible : What is the investment value of the convertible? What is the conversion premium?
What is minimum number of votes needed to ensure election : If the firm uses cumulative voting to elect its board, what is the minimum number of votes needed to ensure election of one member to the board?

Reviews

Write a Review

Financial Management Questions & Answers

  Financial analysis-taxes and cash flow

Lecture concepts: Financial statements and financial analysis, Taxes, and Cash Flow

  Calculate the present value-annual interest rate

Calculate the present value of $10,000 to be received in exactly 10 years, assuming an annual interest rate of 9%.

  Use the npv decision rule to evaluate project

Use the NPV decision rule to evaluate this project; should it be accepted or rejected?

  Determine the unknown lump sum amount that would make

Using an interest rate of 5.50%, determine the unknown lump sum amount that would make the present value of both prizes equivalent.

  Issuing final liquidating dividend

The company has stated that it plans on issuing a dividend of $0.60 a share at the end of this year and then issuing a final liquidating dividend of $2.90.

  Same stock having the same exercise price and maturity

From a geometric viewpoint, how is the position diagram for a put option related to the diagram of a call option on the same stock having the same exercise price and maturity?

  A major drawback of corporation

A major drawback of a corporation (other than a Subchapter-S, or Tax Option corporation

  What would the bond equivalent yield

Teresa is looking at Treasury bill data from yesterday’s Wall Street Journal. She observes an “ask” discount yield of 6.58%, on T-bills with 124 days left to maturity. What would the bond equivalent yield have been, based on the asked prices?

  Best guess as to the value of the bond

What is your one best guess as to the value of the bond?

  Compute the present equivalent cost of the instrument

The purchase price of an instrument is $12,000 and its estimated mainte­nance costs are $500 for the first year, $1500 for the second and $2500 for the third year. After three years of use the instrument is replaced; it has no salvage value. Compute ..

  What is the expected return and standard deviation

What is the expected return and standard deviation of your client’s portfolio?

  Corry energy has three separate investment choices

Corry Energy has three separate investment choices with a 9% corporate hurdle rate and $6 million to apply to capital investments in 2014.

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