The CEO of Garneau Cinemas is considering making a movie and must decide between a comedy and a thriler-t doesn't have t

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The Ceo Of Garneau Cinemas Is Considering Making A Movie And Must Decide Between A Comedy And A Thriler T Doesn T Have T 1 (26.73 KiB) Viewed 8 times

The CEO of Garneau Cinemas is considering making a movie and must decide between a comedy and a thriler-t doesn't have the production space to make both. The comedy is expected to cost $25 million up front (at t= 0). After that, it is expected to make $18 million in the first year (at t= 1) and 54 million in each of the following two years (att-2 and t=3). In the fourth year (at 1-5), it is expected that the movie can be sold into syndication for $2 million with no further cash flows back to Gameau Cinemas. The thriler is expected to cost $40 million up front (at t=0) After that it is expected to make $20 million in the first year (at t= 1) and $4 million in each of the following four years (at t 2, 3, 4, and 5) In the soth year (at t= 6), it is expected that the movie can be sold into syndication for $25 million with no further cash flows back to Gameau Cinemas The cost of capital is 11%, and Gameau usually requires projects to have a payback within four years. Determine each project's payback and NPV, and advise the CEO what she should do The payback for the comedy is The payback for the thriller is (Round to two decimal places as needed.) years, and the NPV of the comedy is $ years, and the NPV of the thriler is S