What is the payback period on the film project

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Question - A movie studio invested $59 million to produce a film. This budget was exhausted in the first year, before the film was completed. It cost an additional $15 million in the second year to complete the film. The film generated net returns of $39 million in the third year, $26 million in the fourth year, and went on to generate net returns of $3 million every year from the fifth year for five years.

Required -

a. What is the payback period on the film project?

b. Determine whether the film project satisfies the studio's eight-year payback rule.

Reference no: EM133079132

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