the npv of the book , Applied Statistics

Bill Clinton reportedly was paid $10 million to write his book My Way. The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $8 million per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10% per year.

a.    What is the NPV of agreeing to write the book (ignoring any royalty payments)?

b.    Assume that, once the book is finished, it is expected to generate royalties of $5 million in the first year (paid at the end of the year) and these royalties are expected to decrease at a rate of 30% per year in perpetuity. What is the NPV of the book with the royalty payments?

Posted Date: 3/14/2013 1:49:08 AM | Location : United States





Hello i am unable to find the value of NPV. Please help me out for this problem

Posted by | Posted Date: 3/14/2013 1:50:47 AM


Related Discussions:- the npv of the book , Assignment Help, Ask Question on the npv of the book , Get Answer, Expert's Help, the npv of the book Discussions

Write discussion on the npv of the book
Your posts are moderated
Related Questions

There may be two values which occur with the same maximum frequency. The distribution is then called bimodal. In a bimodal distribution, the value of mode cannot be determined with

Grouped Data  In order to find the median, the median class is to be first located and then interpolation is to be used by assuming that items are evenly spaced over the entire

Where do I Access the gss04student_corrected dataset


Significance of Correlation The study of correlation is of immense use in practical life. Correlation analysis contributes to the understanding of economic behavior, aids in lo


In an agricultural experiment, we wish to compare the yields of three different varieties of wheat. Call these varieties A, B and C. We have a ?eld that has been marked into a 3 *

Year Production 2006 8 2007 6 2008 10 2009 12 2010 11 2011 15 2012 14 2013 16 Determine the trend from data given above?

Q. Compute the output of correlation? The following figure shows (a) a 3-bit image of size 5-by-5 image in the square, with x and y coordinates specified, (b) a Laplacian