Arundel Partners: the Sequel Project

With the purchase of sequel rights, what Arundel is achieving is to have a call option on the revenue that each movie brings. This helps to remove the uncertainty and risks associated with producing a movie, especially with regard to moviegoers’ taste. With the sequel right, Arundel will only exercise this option to produce a sequel if the first movie proved to be popular and the sequel is hence predicted to bring in profits. This provides downside protection, as huge losses (due to high production costs) associated with a failed movie will be avoided.

4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?

Commercial’s NPV is $.1516 million (see Table 3). This was determined by using the present values of the four year lease agreement between Prudent and Commercial. We concluded that Commercial’s discount rate will be 10% because of their opportunity cost. Commercial needs to have a residual value on the DAS of 6.8 million or greater, which will give them a positive net present value. Therefore, if their net present value shows negative, they would not want to lease to us. Assuming Commercial receives the same 5 year MACRS rate on the equipment purchase, then the system should be worth 7.01 million (book value) at the end of year 4 (see Table 4). This allows Commercial to have a positive NPV of $.1516 million (see Table 4). Therefore, they would be willing to lease the DAS to us.

Intercede for Rev Steve and Mrs. Alison Trudel, the new pastoral couple at Cape Cod Bible Alliance Church in Brewster, Massachusetts. Pray that God will grant them a strong sense of vision for God’s plans regarding the church and congregation.

A central part in developing your competencies will be active and thoughtful contributions to the class discussion. Your contributions will be critical to your learning and the learning of your classmates. EVERYONE is expected to participate in each class session. I usually ask for volunteers, but I also cold call people throughout the class session.

11. Returning the risk free rate to 4%, what happens to the value of the option if the Whirlpool’s cost of capital goes from 9% to 15%?

5. Assume that a maximum of ten sequels can be made in any given year (choose the sequels that are most likely to be made—for example if the main character in the film dies then a sequel is unlikely to be made) Using the same decision-tree approach, what would you estimate to be the per-movie value of the sequel rights to the entire portfolio of 99 movies released in 1989 by the six major studios?

This films budget was between 40 to 50 million dollars and on their opening weekend to which it was only shown on 14 screens brought in 510,632 in America and has made

AIA Charlotte has always desired to expand its resources as well as educating its members and the industry on the use of technology in practice. That process started back in 2012 with the formation of a BIM Committee in search of helping showcase ideas on how BIM was changing our industry. As the use of technology increased in our industry and went well beyond BIM this group of AEC professionals began to look for other directions for the committee. This search lead us to the AIA Knowledge Community and eventually the National AIA Technology in Architectural Practice (TAP) group. AIA TAP serves as a resource for AIA members, the profession, and the public in the deployment of computer technology in the practice of architecture. TAP also

Chesapeake IT Consultants (CIC) is an Information Technology consulting firm whose Headquarters is based in Baltimore, Maryland. Over the years the consulting firm has grown opening 2 satellite locations in Bethesda Maryland and Herndon Virginia. Chesapeake IT Consultants (CIC) is well known for its services providing outstanding consultancy services. To accomplish outstanding service CIC over 400 highly trained professional employees who offer consultancy services to its clients and future clients. While CIC gross over $80,000,000 annually it is very expensive to maintain a large number of employees. When the company knows it will win a contract it recruit employees for that contract therefore those employees are employed

This would help give Arundel Partners an advantage while negotiating because studios would normally misprice the rights to be lower than actuality, since it is not normality for them to assign a value to sequel rights before the first film was in production.

The fair value of an option grant ideally would be based on the observable market price of the option or of one with similar terms and conditions. As the market price is not usually observable, fair value measurement techniques use option-pricing models—such as a Black-Scholes model, a Monte Carlo simulation technique, or a lattice model to determine a fair value of an option—that is, one that accounts for factors such as the stock price at the grant date, the strike price, the expected life of the option (that is, the expected period of time between the grant date and the exercise date), the volatility of the underlying stock and the expected dividends on it, and the risk-free interest rate over the expected life of the option. Assuming that the fair-value option –pricing model determines the company’s total compensation expense to be $300,000, then this company will expense $100,000 each of the following three years.

These models are very similar, they are based on similar theoretical foundations and have a series of assumptions, such as; Geometric Brownian Motion and risk-neutral valuation. However, both models have unique differences which are foundational in there model, some of which are highlighted below.

113 - 131). In details, by having the sensitive-adaptation characteristic in cost-identifying, the cost-based basis is claimed to be superior than the others in case the users have to evaluate the indirectly contributed or having the insignificant variability in the contractual cash-inflow assets and the settle-term-payment liabilities; Meanwhile, the current-market-price basis (the direct-contributed future cash-inflow assets) and the cash-flow-based (the unstated-term liabilities) shows their effectiveness in generating relevant information (ibid.) Indeed, these preliminary views are generally accepted by the most of the users (The Line Group, 2014; MU, 2014; HKAB, 2014). For the partial agreed users, in common, most concerns are raised over the cost occurs (NUS, 2014; Kingston Smith, 2014), the assumption of the market scenario in DP (HoTARAC, 2014; Imamura, 2014 - and later be viewed in the over-simplified issue that mentioned by the disagreed users), and the lack of options in case specific information is needed (ESMA, 2014; HoTARAC, 2014). In specifics, the effectiveness of the cost-based technique is questioned by both HoTARAC and Imamura by giving an example of changing in market scenario as there appears a reliable market price for the same type of mentioned assets (HoTARAC) or pointing out the unrealistic assumption such as cash flow will not occur for many years in paragraph 6.85 of DP

Consider Real Option theory as a method to remove some of the risk in capital investments. Helpful assistance and decision