What is the payback period for this investment does the


You are considering making a movie. The movie is expected to cost $10.3 million up front and take a year to produce. After that, it is expected to make $4.9 million in the year it is released and $1.7 million for the following four years.

a) What is the payback period for this investment?

b) If you require a payback period of two years, will you make the movie?

c) Does the movie have positive NPV if the cost of capital is 10.1 %?

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Financial Management: What is the payback period for this investment does the
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