FIN515_Homework5_Roxanne Robinson - FIN515_Homework_5_Roxanne Robinson FIN515_Homework_5_Roxanne Robinson Professor Jerry Hartzog Managerial Finance

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FIN515_Homework_5_Roxanne Robinson FIN515_Homework_5_Roxanne Robinson Professor Jerry Hartzog – Managerial Finance FIN515 Roxanne Robinson
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Problems (p. 228) 7-20 Payback and NPV Problems (p. 228)You are considering making a movie. The movie is expected to cost $10 million upfront and take a yearto make. After that, it is expected to make $5 million when it is released in one year and $2 million per year 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 ofcapital is 10%?
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  • Spring '10
  • Unknown
  • Net Present Value, PAYBACK PERIOD, Pisa Pizza, new pizza

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