As part of a broad effort to invigorate its pipeline and move more aggressively into biotechnology, GoodDrugs Inc plans to set up a new division dedicated to developing biotherapeutic drugs and research technologies The company expects to pay $240 million for set up costs of its new division now and $12 million in operating costs each year for the next 13 years The company estimates that the new division will be able to generate annual revenue of $84 million 8 years from now. What is the net present worth of this investment if the company's minimum attractive rate of return is 7% per year and the study period is 13 years? Assume there is no salvage value

As part of a broad effort to invigorate its pipeline and move more aggressively into biotechnology, GoodDrugs Inc plans to set up a new division dedicated to developing biotherapeutic drugs and research technologies The company expects to pay $240 million for set up costs of its new division now and $12 million in operating costs each year for the next 13 years The company estimates that the new division will be able to generate annual revenue of $84 million 8 years from now. What is the net present worth of this investment if the company's minimum attractive rate of return is 7% per year and the study period is 13 years? Assume there is no salvage value

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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