You are considering making a movie. The movie is expected to cost $10.9 million upfront and take a year to make. After? that, it is expected to make $4.3 million in the first year it is released? (end of year? 2) and $1.7 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 10.6%??
According to the NPV? rule, should you make this? movie?