question archive George Michael has been offered $14 million (to be paid in 1 year from now) for starring in Batman 4, Batman 5, and Batman 6
George Michael has been offered $14 million (to be paid in 1 year from now) for starring in Batman 4, Batman 5, and Batman 6
Subject:FinancePrice:2.86 Bought3
George Michael has been offered $14 million (to be paid in 1 year from now) for starring in Batman 4, Batman 5, and Batman 6. If Michael accepts this offer, he will have to forego acting in Ocean's 14, Ocean's 15, and Ocean's 16 that would have paid him $5 million each (in 2, 3, and 4 years from now). Michael assumes his personal cost of capital is 10%. Based on this information, the NPV of Michael's decision to accept Batman films is:
a. $1.42 million
b. $1.56 million
c. $12.72 million
d. $14.00 million
