13. A female CEO of a big corporation is fired. A publisher offers her to write her memoires on her life as a female exe
Posted: Fri Jul 01, 2022 7:42 am
13. A female CEO of a big corporation is fired. A publisheroffers her to write her memoires on her life as a female executivein a male world. He offers her an upfront payment of $500,000 now.The book needs to be ready in five years. If she succeeds todeliver a publishable manuscript at the end of year 5 she willreceive another $1,000,000. In the mean time she needs to focus onwriting the book which implies she cannot accept another job as CEOelsewhere. She estimates this opportunity cost to equal $250,000peryear until and including year 5. Assume a discount rate of 10%.The Net Present Value of this offer comes closest to...A) $150,000B) $175,000C) $170,000D) $180,000