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What is the payback period of this investment

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Reference no: EM132857022

Question - You are considering making a movie. The movie is expected to cost $10.2 million upfront and take a year to make. After that, it is expected to make $4.2 million in the first year it is released (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, will you make the movie? What is the NPV of the movie if the cost of capital is 10.8%? According to the NPV rule, should you make this movie?

Reference no: EM132857022

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