Bill Clinton reportedly was paid an advance of $10.0 million to write his book My Life. Suppose the book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could eam $7.5 million a year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10.3% per year. a. What is the NPV of agreeing to write the book (ignoring any royalty payments)? b. Assume that, once the book is finished, it is expected to generate royalties of $5.2 million in the first year (paid at the end of the year) and these royalties are expected to decrease at a rate of 30% per year in perpetuity. What is the NPV of the book with the royalty payments? a. What is the NPV of agreeing to write the book (ignoring any royalty payments)? The NPV of agreeing to write the book is $ million. (Round to three decimal places.)

You want to set aside money in order to present your son with a 25,000 trip upon his graduation from high school in 3 years. If your opportunity cost of capital is 9% per year, how much do you need to set aside? Round your answer to the nearest dollar?

Ashley projects that she can get $100,000 cash per year for 5 years on a real estate investment project. If Ashley wants to earn a rate of return of 9%, what is the maximum that she should pay for the investment? (rounded to the nearest dollar)A. $360,478 B. $446,429 C. $560,000 D. $388,965

Roger has a levered cost of equity of 0.14. He is thinking of investing in a project with upfront costs of $7 million, which pays $2 million per year for the next 9 years. He is going to borrow $5 million to offset the startup costs at a rate of 0.08. His tax rate is 0.4. He will repay this loan at the end of the project. What is the NPV of this project, using the FTE method?

Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Patz Corporation is considering the purchase of a computer-aided manufacturing system. The cash benefits will be 800,000 per year. The system costs 4,000,000 and will last eight years. Compute the NPV assuming a discount rate of 10 percent. Should the company buy the new system? 2. Sterling Wetzel has just invested 270,000 in a restaurant specializing in German food. He expects to receive 43,470 per year for the next eight years. His cost of capital is 5.5 percent. Compute the internal rate of return. Did Sterling make a good decision?

Ronald has an investment opportunity that promises to pay him $45,000 in five years. He could earn a 8% annual return investing his money elsewhere. What is the most he would be willing to invest today in this opportunity? (EV of $1. PV of $1. EVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answer to 2 decimal places.) Present value

Brian owns a tanning salon that is expected to produce annual cash flows forever. The tanning salon is worth $636,600.00 and the cost of capital is 6.40%. Annual cash flows are expected with the first one due in one year and all subsequent ones growing annually by 2.30%. What is amount of the annual cash flow produced by the tanning salon in 1 year expected to be? O $55,384.20 (plus or minus $10) O $26,100.60 (plus or minus $10) O $155,268.29 (plus or minus $10) O $15,526,829.27 (plus or minus $10)

Stuart daniels estimates that he will need $22,000 to set up  small business in 8 years. a) how much ( in $) must stuart invest now at 8% interest compound quartely  to achieve his goal ? b) how much compound interest ( in $) will he earn on the investment.

An investor is purchasing an industrial building. He needs to replace the roof today at a cost of $50,000. The economic life of the roof is 20 years. Inflation is 3.0%. He has an investment account that yields 6.0 % . How much must he put aside monthly to cover the future cost of the roof?

An investor is purchasing an industrial building.He needs to replace the roof today at a cost of $50,000. The economic life of the roof is 20 years. Inflation is 3.0%. He has an investment account that yields 6.0%. How much must he put aside monthly to cover the future cost of the roof?