Newly developed COVID-19 vaccine, which cost $25,000,000 to develop and $0.45 per dose to produce. The mid-year population of the United States was estimated to be 310,000,000 people. If every person in the country is vaccinated with a single dose, the company must charge $0. the nearest 1/10th of a cent, to just break even. per dose, to
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- Thirdd Foods is considering producing a new candy, Yum. Thirdd has spent two years and P450,000 developing this product. Thirdd has also test marketed Yum, spending P100,000 to conduct consumer surveys and tests of the product in 25 states. Based on previous candy products and the results in the test marketing, management believes consumers will buy 4 million packages each year for ten years at 50 cents per package. Equipment to produce Yum will cost Thirdd P1,000,000, and P300,000 of additional net working capital will be required to support Yum sales. Thirdd expects production costs to average 60% of Yum’s net revenues, with overhead and sales expenses totaling P525,000 per year. The equipment has a life of ten years, after which time it will have no salvage value. Working capital is assumed to be fully recovered at the end of ten years. Depreciation is straight-line and Thirdd’s tax rate is 45%. The required rate of return for projects of similar risk is 10%. A. What is the…Pfizer Inc is an American multinational pharmaceutical company. After extensive medical and marketing research, Pfizer believes it can penetrate the antiviral drugs market. It is considering two alternative products. The first is an emergency medication for coronavirus (COVID-19) for people ages 12 and older. The second is a pharmacy medicine for the same virus but for patients ages 18 and older. Both products would be introduced at a price of £8.75 per package in real terms. The emergency medication is projected to sell 2 million packages a year, whereas the pharmacy medicines would sell 4.0 million packages a year. Cash costs of production in the first year are expected to be £4.65 per package in real terms for the emergency medication. Production costs are expected to be £5.20 in real terms for pharmacy medicines. All prices and costs are expected to rise at the general inflation rate of 2 percent. Either product requires further investment. The emergency medication could be…XYZ Foods is considering producing a new candy, Tira-Tira. XYZ has spent two years and P450,000 developing this product. XYZ has also test marketed Tira-Tira, spending P100,000 to conduct consumer surveys and tests of the product in 25 states. Based on previous candy products and the results in the test marketing, management believes consumers will buy 4 million packages each year for ten years at 50 cents per package. Equipment to produce Tira-Tira will cost XYZ P1,000,000, and P300,000 of additional net working capital will be required to support Tira-Tira sales. XYZ expects production costs to average 60% of Tira-Tira’s net revenues, with overhead and sales expenses totaling P525,000 per year. The equipment has a life of ten years, after which time it will have no salvage value. Working capital is assumed to be fully recovered at the end of ten years. Depreciation is straight-line and XYZ’s tax rate is 45%. The required rate of return for projects of similar risk is 10%. A. What…
- Vaccination is a simple, safe, and effective way of protecting people against harmful diseases, before theycome into contact with them. It uses your body’s natural defenses to build resistance to specific infectionsand makes your immune system stronger. The ABC company purchases a vaccine named X to supply theircustomer hospitals and pharmacies. The ABC company purchases the vaccine X at a weekly rate of 800packages of vaccines per week, and the company uses a 12 percent annual interest rate to compute holdingcosts. The vaccines can be purchased from two suppliers, Q and R. Supplier Q offers the following “allunits discount schedule”:Following the outbreak of the Novel Coronavirus (COVID 19), CPC a pharmaceutical companyis considering introducing a new vaccine unto the market to help fight the virus. This will requirethe injection of huge capital to the tune of GH¢40,000,000 for the purchase of the equipment forproduction. It will cost CPC an additional GH¢ 5,500,000 to set up the production facility andinstall that equipment for production. Mr. Smart, the CEO of CPC believes that the vaccine couldbe manufactured in a building owned by the firm and located in East Legon. This vacant buildingand the land can be sold for GH¢ 1,500,000 after taxes. CPC will finance the production of theFollowing the outbreak of the Novel Coronavirus (COVID 19), CPC a pharmaceutical company is considering introducing a new vaccine unto the market to help fight the virus. This will require the injection of huge capital to the tune of GH¢40,000,000 for the purchase of the equipment for production. It will cost CPC an additional GH¢ 5,500,000 to set up the production facility and install that equipment for production. Mr. Smart, the CEO of CPC believes that the vaccine could be manufactured in a building owned by the firm and located in East Legon. This vacant building and the land can be sold for GH¢ 1,500,000 after taxes. CPC will finance the production of the vaccine (including initial working capital investment) by issuing 2000,000 new common stocks at GH¢ 20 per share from its existing shareholders. A total of GH¢ 40,000,000 is expected to be raised from the rights issue. It expects to finance the remaining investment including initial working capital investment from the issue of a…
- Following the outbreak of the Novel Coronavirus (COVID 19), CPC a pharmaceutical company is considering introducing a new vaccine unto the market to help fight the virus. This will require the injection of huge capital to the tune of GH¢40,000,000 for the purchase of the equipment for production. It will cost CPC an additional GH¢ 5,500,000 to set up the production facility and install that equipment for production. Mr. Smart, the CEO of CPC believes that the vaccine could be manufactured in a building owned by the firm and located in East Legon. This vacant building and the land can be sold for GH¢ 1,500,000 after taxes. CPC will finance the production of the vaccine (including initial working capitalinvestment) by issuing 2000,000 new common stocks at GH¢ 20 per share from its existing shareholders. A total of GH¢ 15,000,000 is expected to be raised from the rights issue. It expects to finance the remaining from the issue of a 5-year bondwith a before-tax yield to…Following the outbreak of the Novel Coronavirus (COVID 19), CPC a pharmaceutical company is considering introducing a new vaccine unto the market to help fight the virus. This will require the injection of huge capital to the tune of GH¢40,000,000 for the purchase of the equipment for production. It will cost CPC an additional GH¢ 5,500,000 to set up the production facility and install that equipment for production. Mr. Smart, the CEO of CPC believes that the vaccine could be manufactured in a building owned by the firm and located in East Legon. This vacant building and the land can be sold for GH¢ 1,500,000 after taxes. CPC will finance the production of the vaccine (including initial working capital investment) by issuing 2000,000 new common stocks at GH¢ 20 per share from its existing shareholders. A total of GH¢ 15,000,000 is expected to be raised from the rights issue. It expects to finance the remaining from the issue of a 5-year bond with a before-tax yield to maturity (YTM)…Following the outbreak of the Novel Coronavirus (COVID 19), CPC a pharmaceutical company is considering introducing a new vaccine unto the market to help fight the virus. This will require the injection of huge capital to the tune of GH¢40,000,000 for the purchase of the equipment for production. It will cost CPC an additional GH¢ 5,500,000 to set up the production facility and install that equipment for production. Mr. Smart, the CEO of CPC believes that the vaccine could be manufactured in a building owned by the firm and located in East Legon. This vacant building and the land can be sold for GH¢ 1,500,000 after taxes. CPC will finance the production of the vaccine (including initial working capital investment) by issuing 2000,000 new common stocks at GH¢ 20 per share from its existing shareholders. A total of GH¢ 15,000,000 is expected to be raised from the rights issue. It expects to finance the remaining from the issue of a 5-year bond with a before-tax yield to maturity (YTM)…
- Parasite Engineering is developing a new product for the parasitic market that services parasites. The opportunity is estimated to be worth $1.0B measured in today’s dollars. The company will need to spend $500M today to begin the research. In five years, the company will have to make a decision as to whether to go into full scale production and begin selling the drug. At that time, the company estimates it will cost $1.5B to move forward. If the appropriate risk-free rate is 2.5%, how high must the annual volatility be to make the project worth beginning?Caramel Enterprises entered into a licensing agreement with Worldwide Lab Servcies for a new vaccine under development. Caramel will receive $92,100,000 if the vaccine receives FDA approval. Based on test results and past experience, Caramel determines that there is a 90% chance that the drug will be approved. The transaction price of this arrangement isA-One Treatment Ltd is involved in the Research and Development (R&D) of a new Covid vaccine for new born children. There is expected to be a very large market for this vaccine in Australia and for other countries world-wide. Once developed it is expected to generate many millions of dollars in revenue for A-One Treatment Ltd. For this R&D it has incurred the following expenditure: a) $100,000 for obtaining a general understanding of the Covid b) $60,000 was spent on conducting various surveys related to the health of new born children c) $200,000 was used for conducting various tests on the new vaccine d) $500,000 for developing and testing a final product (Covid Vaccine) Required: For each of above expenditure determine clearly how each expenditure will be treated for accounting purpose