ill Clinton reportedly was paid an advance of $ 10.0 million to write his book My Life. Suppose the book took three year

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ill 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 earn $ 7.9
million a year (paid at the end of the year) speaking instead of
writing. Assume his cost of capital is 9.2 % per year.
1) 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 $ 5.4 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?