The present value of the new drug if the interest rate

Assignment Help Financial Management

Reference no: EM132059633

You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years.

You expect that the drug's profits will be $3 million in its first year and that this amount will grow at a rate of 4% per year for the next 17 years.

Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero.

What is the present value of the new drug if the interest rate is nbsp 9% per year?

Reference no: EM132059633

Questions Cloud

Find the price equation : A company has determined that the maginal cost price of x units of product is p(x)= -3000/(2x+10) to the power of 3 find the price equation?

Find the equivalent annual annuity value needed to compare : Project Q costs 200. It provides inflows of 130 per year for three years. The cost of funds is 6%. Find the equivalent annual annuity value needed.

Discuss about the depriciated straight line : A project will produce an operating cash flow of $7,300 a year for three years. The initial investment for fixed assets will be $11,600.

Find the arc length of the curve : In each of the following cases, find the arc length of the curve.

The present value of the new drug if the interest rate : You expect that the drug's profits will be $3 million in its first year and that this amount will grow at a rate of 4% per year for the next 17 years.

Find the volume of the solid obtained by revolving r : Let R be the region bounded by the curves y = v(x)*e-x, y = 0, and x = 2. Find the volume of the solid obtained by revolving R about the x-axis.

Side of square be for maximum volume : What should the side of square be for maximum volume? (State your answer correct to two decimal places.)

Find the value of npv in all requirements : At a required return of 12 percent, what is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16)

Length of string increasing : A kite 30 meters above the ground moves horizontally at a speed of 6m/s. At what rate is the length of string increasing when 50 meters of the string has been

User Account

All Pages