question archive 4) Suppose that Arundel purchases the sequel rights to all 99 movies from Exhibit 7 and chooses to only exercise the rights to the sequels that seem profitable
4) Suppose that Arundel purchases the sequel rights to all 99 movies from Exhibit 7 and chooses to only exercise the rights to the sequels that seem profitable
Subject:MathPrice: Bought3
4) Suppose that Arundel purchases the sequel rights to all 99 movies from Exhibit 7 and chooses to only exercise the rights to the sequels that seem profitable. That is, those hypothetical sequels from Exhibit 7 that have a one-year return greater than 12 percent. a) How many sequels would Arundel produce? b) What is the total PV of net inflows at t=4 from these sequels? c) What is the total cost at t=3? d) What is the NPV of producing these sequels? e) What is the maximum Arundel would be willing to pay for the 99 sequel rights?
