Explain the finding payback period

Reference no: EM1313442

Explain the Finding payback period and NPV at given payback period

I would like to make a movie. The movie is expected to cost $10 million upfront and take a year to make. After that, it is expected to make $5 million in the year (release) and $2 million for the following four years. What is the payback period? If I require a payback period of two years, should I make the movie? Does the movie have positive NPV if the cost of capital 10%?

Reference no: EM1313442

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