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Use the following information to answer the question(s) below.
Sarah Palin reportedly was paid a $11 million advance to write her book Going Rogue.The book took one year to write.In the time she spent writing,Palin could have been paid to give speeches and appear on TV news as a political commentator.Given her popularity,assume that she could have earned $8 million over the year (paid at the end of the year) she spent writing the book.
-Assume that once her book is finished,it is expected to generate royalties of $5 million in the first year (paid at the end of the year) and these royalties are expected to decrease by 40% per year in perpetuity.Assuming that Palin's cost of capital is 10% and given these royalties payments,the NPV of Palin's book deal is closest to:
Tetany
A condition characterized by severe muscle cramps and spasms caused by an imbalance in calcium levels or other electrolytes in the body.
Endocrine Glands
Glands of the endocrine system that release hormones directly into the bloodstream to regulate bodily functions.
Kidneys
A pair of organs located in the abdominal cavity, responsible for filtering waste from the blood and producing urine.
Adrenal Medulla
The inner part of the adrenal gland that produces adrenaline and noradrenaline, hormones involved in stress response.
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