What is payback period of this investment

Assignment Help Financial Management
Reference no: EM131051805

You are considering making a movie. The movie is expected to cost 10.4 million up front and take a year to produce. After that, it is expected to make 4.4 million in the year it is released and 1.9 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you make the movie? Does the movie have positive NPV if the cost of capital is 10.2%. Round the payback period to one decimal place

Reference no: EM131051805

Questions Cloud

An entrepreneur and to evaluate a sample business plan : 1. Go to www.bizmove.com/other/quiz.htmand take the interactive entrepreneurial quiz to find out whether you have the qualities to be a successful entrepreneur.
What is the market value of the debt if the debt matures : A company has an asset value of $10 million with a standard deviation of 15%. The company has $8 million face value of zero coupon risky debt outstanding. What is the market value of the debt if the debt matures in two years? Assume a risk free rate ..
Why does the value of a stock depend on dividends : Why does the value of a stock depend on dividends? A substantial percentage of the companies listed on the NYSE and NASDAQ don’t pay dividends, but investors are nonetheless willing to buy shares in them. How is this possible given your answer to the..
Discuss the basic assumptions of technical analysis : Discuss the basic assumptions of technical analysis. What is the difference between technical analysis and fundamental analysis? Describe one chart pattern and its potential significance is forecasting market direction.
What is payback period of this investment : You are considering making a movie. The movie is expected to cost 10.4 million up front and take a year to produce. After that, it is expected to make 4.4 million in the year it is released and 1.9 million for the following four years. What is the pa..
Describe the tax consequences for the partnership : Pick one of these options and describe the tax consequences for the partnership and the partners for the option selected. If Carol should die before the plan is executed, how would this option be affected?
What sampling method is used to select your sample data : Statistics for Business and Finance (BUS5SBF) Assignment. What sampling method is used to select your sample data? Do you think that is the best method of sampling? Why not? Why yes? What is the best statistic used to compare the volatility in WEF, W..
Compute the standard deviation of monthly returns : The past five monthly returns for Kohl’s are 3.54 percent, 3.62 percent, −1.68 percent, 9.25 percent, and −2.56 percent. Compute the standard deviation of Kohls’ monthly returns. (Do not round intermediate calculations and round your final answer to ..
Discuss the possible causes of the financial crisis : FIN200 Assignment - Explain the scale and impact of financial crisis in economies of different countries including your own country, identify some of proposed reforms.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the hourly cost of this equipment

A contractor has purchased a piece of equipment for $150,000 and expects to use it 1,000 hrs per year for 10 years. The salvage value is $8,000 after 10 years. A single major repair of $20,000 is expected at the end of the 5th year. With an interest ..

  Purchase occurred in which market

Valerie bought 200 shares of Able stock today. Able stock has been trading for some time on the NYSE. Valerie's purchase occurred in which market?

  Each six months into building and loan association

A man deposits $300 at the end of each six months into building and loan association that pays 10% compounded semi-anually. How much will he have to his credit at the end of 10 years?

  Calculate covariance between the returns of stock

Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.13 and 0.19, respective..

  Received loan from local bank with nominal interest rate

Recently, Jamie and Jake each bought new cars. Both received a loan from a local bank with a nominal interest rate of 12% where payments are made at the end of each month, and they both pay the same monthly payment. Jamie's loan is for $15,000; howev..

  Calculate mean-variance and sharpe ratio of cash flows

Calculate mean, variance, and Sharpe ratio of the following cash flows. a 25% probability of making $1000, a 20% probability of making $200, a 10% probability of making $100, and a 45% probability of making nothing

  Equity used is from reinvested earnings

MM Entreprises stock trades for $52.50 per share. It is expected to pay $2.50 dividend at yearend, and the dividend is expected to grow at a constant rate of 5.50% a year. The before tac cost of debt is 7.50% and the tax rate is 40%. The target capit..

  Japans 2013 wbc entry will certainly not feature any type

the 3rd edition of the world baseball classic wbc will certainly be played from march 2-19 authentic panthers jersey

  Common stock outstanding-semi-annual bonds outstanding

Titan Mining Corporation has 9.5 million shares of common stock outstanding and 390,000 5 percent semi-annual bonds outstanding, par value $1,000 each. The common stock currently sells for $43 per share and has a beta of 1.25, and the bonds have 15 y..

  How is net present value profile used to compare projects

How is a net present value profile used to compare projects? What causes conflict in the ranking of projects via net present value and internal rate of return? Does the assumption concerning the reinvestment of intermediate cash inflows tend to favor..

  What is the cost of new common stock

Builtrites common stock is currently selling for $48 a share and the firm just paid an annual dividend of $2.30 per share. Management believes that dividends and earnings should grow at 8% annually. Since new stock would need to be sold to finance an..

  How are the company''s assets classified

What were the companies total current liabilities at the end of the previous annual reporting period?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd