What is the payback period of investment

Assignment Help Financial Management

Reference no: EM131568350

You are considering making a movie. The movie is expected to cost $10.1 million upfront and take a year to make. After that, it is expected to make $4.9 million in the first year it is released (end of year 2) and $1.8 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 10.1%? According to the NPV rule, should you make this movie?

What is the payback period of this investment?

The payback period is years. (Round up to nearest integer.)

Reference no: EM131568350

Questions Cloud

What is involved in the systems survey : What is involved in the systems survey? Do you believe that different disciplines should work separately on their parts or work together and why

Equity is equal to market value of equity : Equity is worth $15 per share, and book value of equity is equal to market value of equity.

Face the foodservice industry today : What are major challenges and pressures that face the foodservice industry today? Research and share at least one challenge that the industry faces

What is the marginal rate of transformation impact : What is the Marginal Rate of Transformation impact? What is the labor-intensive good? What is the labor-abundant country? What is the capital-abundant country?

What is the payback period of investment : You are considering making a movie. What is the payback period of this investment?

Calculate the cost of capital for operations : Calculate the cost of capital for operations (WACC) for ACME, Inc. Use the capital asset pricing model to estimate the cost of equity capital

What price does the dividend-discount model predict : If Colgate's equity cost of capital is 7.5% per year, what price does the dividend-discount model predict Colgate stock should sell for today?

Key advantages to forming a corporation : One of the key advantages to forming a corporation is that its owners are immune from personal liability for business debts and other obligations.

How many comparison does insertion sort use to sort the list : Describe an algorithm based on the binary search for determining the correct position in which to insert a new element in an already sorted list.

User Account

All Pages