Use the Following Information to Answer the Question(s)below

question 69

Multiple Choice

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.
-Assuming that Palin's cost of capital is 10%,then the NPV of her book deal is closest to:

• A)$2.00 million
• B)$2.20 million
• C)$3.00 million
• D)$3.75 million

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Definitions:

Confidence Interval

A type of estimate computed from the statistics of observed data, which might contain the true value of the unknown population parameter.

Two-Wheeled Bicycle

A vehicle consisting of two wheels held in a frame one behind the other, propelled by pedals and steered with handlebars attached to the front wheel.

Population Distributions

The distribution of a particular characteristic (e.g., age, height, test scores) across all individuals within a larger group or population.

Confidence Interval

An estimated range of values, derived from sample statistics, within which a population parameter is expected to lie with a certain level of confidence.