What is the present value of the video game franchise

Reference no: EM131981056

Question: Your uncle developed a new video game franchise and left the rights to you. Under current copyright law, your intellectual property is protected for 95 years. You expect that the profits from the franchise will be $1 million in its first year and that this amount will grow at a rate of 5% per year during the life of the copyright. Assume each year's profits are received at the end of the period. Further assume that once the copyright expires, imitations and knockoffs will drive the profits from the intellectual property to zero. What is the present value of the video game franchise if the interest rate is 9% per year?

Reference no: EM131981056

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