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What is the npv of the movie

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Reference no: EM131082556

You are considering making a movie. The movie is expected to cost 10.9 million up front and it takes a year to make. After that, it is expected to make 4.2 million in the 1st year it is released (end of year 2) and 1.8 million for the following 4 years (end of year 3 through year 6). What is the pay back required in 2 years? Will you make the movie? What is the NPV of the movie if the cost of capital is 10.8%? According to the NPV rule, Should the movie be made?

Reference no: EM131082556

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