You work for a ptaarmacesitical company that has developed a new drug. The patent on...
50.1K
Verified Solution
Link Copied!
Question
Finance
You work for a ptaarmacesitical company that has developed a new drug. The patent on the drug will last 17 yeark. You expect that the drug's profits will be $3 million in its fint year and that this amount will grow at a rate of 3% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition wilikely drive profits to zero. What is the present value of the nere drug if the interest rate is 10% per yoar? The present volie of the new ang is 5 milinon. (Round to three decinal piaces.)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
