Figure out most they should pay for a license from sohnco

Reference no: EM13184493

Yuli-One Copters is in the business of designing and manufacturing helicopters for commercial, military and pleasure use.They are considering a $200 million upgrade to their production line for the Yuli Jumper-a two person helicopter with a payload of 300 pounds plus the two occupants.The potential cash flow is estimated at net revenues of $85 million per year for seven years.Recently, they were advised of potential patent infringement and to eliminate this problem they are considering buying a license. SohnCo will sell a license is good for two years of exclusive use of the patent.Yuli-One Copters uses a corporate MARR of 18% and their risk-free alternatives are 4%.The VP of Engineering at Yuli-One Copters estimates market volatility in demand is 40%.The VP of Marketing estimates market volatility in demand at 35%.

1. Since the VP's trust you, they asked you to figure out the most they should pay for a license from SohnCo. Explain your answer in detail.

2. Yuli-One Copters is known to be aggressive in ignoring intellectual property claims. Imagine they just go ahead with the project as stated above without buying the license.Sometime in year 3 of 7, a court decision requires them to reimburse AllaCo $300 million.Because Yuli Copters has this strategy, they are tooled up to be in court and they incur minimal extra cost in defending their actions.They finally pay, however, at the end of year

3. How does this strategy work for them?Are they better off licensing or being aggressive?Explain your answer in detail.

Reference no: EM13184493

Questions Cloud

Ideal gas flows through a horizontal tube at steady state : An ideal gas flows through a horizontal tube at steady state. no heat is added and no shaft work is done.the cross sectional area of the tube changes with length and this causes the velocity to change

What texts analysis of inflation-unemployment cycle suggest : As the economy slipped into recession in 1980 and 1981, the Fed was under enormous pressure to adopt an expansionary monetary policy. Suppose it had begun an expansionary policy early in 1981. What does the text's analysis of the inflation-unemplo..

Explain what is the mass in grams of acetone : what is the mass in grams of 17.55ml of acetone? and what is the volume in milliter of 7.26g of acetone?

State the tube and concentrated nh3 solution : Suppose you have a glass tube which is 1 m long and 2.5 cm in diameter. Concentrated HCl acid is placed at one end of the tube and concentrated NH3 solution is placed at the other end.

Figure out most they should pay for a license from sohnco : Since the VP's trust you, they asked you to figure out the most they should pay for a license from SohnCo. Explain your answer in detail and How does this strategy work for them?Are they better off licensing or being aggressive?Explain your answer ..

Find direct expenditure off set than spending on health care : 1. Why might federal spending on roads, waterways, or national security be less subject to direct expenditure off sets than spending on health care or education 2.What might account for the fact that estimates of effect time lags for fiscal p..

State solvent by evaporation filtering and decolorizing : During the purification and recrystallization of a solid why can't you just remove the solvent by evaporation after filtering and decolorizing

Josue is in which of kübler-ross'' stages of dying : Josue has incurable cancer. However, he promises to lead a reformed life dedicated to God if God will spare his life. Josue is in which of Kübler-Ross' stages of dying?

Who should conduct workplace investigations : Who should conduct workplace investigations? What are the pros and cons of using internal versus external investigators?

User Account

All Pages