Bill Clinton reportedly was paid 10 million to write his book MyLife. The book took three years to write. In the time he spentwriting, Clinton could have been paid to make speeches. Given hispopularity, assume that he could earn 8 million per year (paid atthe end of the year) speaking instead of writing. Assume his costof capital is 10% per year.
What is the IRR of agreeing to write the book (ignoring anyroyalty payments)? Should Clinton agree to write the book (ignoringany royalty payments)? Why?
