Jack Smith reportedly was paid $9.5 million to write his book "The Fork in the...
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Jack Smith reportedly was paid $9.5 million to write his book "The Fork in the Road". The book took three years to write. In the time he spent writing, Jack Smith could have been paid to make speeches. Given his popularity, assume that he could earn $8.3 million a year (paid at the end of the year) speaking instead of writing. If his cost of capital is 10% per year, then the NPV of agreeing to write the book (ignoring any royalty payments) is negative $11,140,872. Required: a. What is the IRR? [Select] Given the information provided in Question 6 (above), please answer the following: b. How many IRRs are theoretically possible in this problem? [Select] c. Does the IRR rule give the right answer in this case? [ Select]
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