you work for a pharmaceutical comapny that developed a new drug. The patent on the drug will last 17 years . You expect the profits to be 1 million in its first year and that the amount will grow 2% for the next 17 years. the present value is if the interest rate is 11%
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you work for a pharmaceutical comapny that developed a new drug. The patent on the drug will last 17 years . You expect the profits to be 1 million in its first year and that the amount will grow 2% for the next 17 years. the present value is if the interest rate is 11%
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- Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17years. You expect that the drug's profits will be $2 million in its first year and that this amount will grow at a rate of 5% 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 10% per year? The present value is?
- Suppose you work for a software company that has developed a new product. The patent on this product will last for seventeen years. You expect that the product will produce cash-flows of $10,000,000 in its 1st year and that this amount will grow at a rate of 4 percent per year for the next seventeen years. Once the patent expires, your competitors will be able to produce equivalents copies of your software and drive any future profits to zero. If the interest rate is 11 percent per year, then what is the present value of producing this software?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 $2 million in its first year and that this amount will grow at a rate of 5% 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 10% per year? The present value of the new drug is $______ million.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 $4 million in its first 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 will likely drive profits to zero. What is the present value of the new drug if the interest rate is 8% per year? The present value of the new drug is $nothing million. (Round to three decimal places.)
- Your group receives a phone proposal to invest in a new business. Thecaller informs you that it will take a $70,000 down payment and the investmentwill return $10,000 a year for the next 10 years. He tells you that theinvestment will return 14 percent. If current interest rates are 8 percent,what is the present value of this investment? How did the caller get14 percent?You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 19 years. You expect that the drug's profits will be $4 million in its first year and that this amount will grow at a rate of 3 * 0/o per year for the next 19 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 12% per year? The present value of the new drug is $ (enter your response here) million.In your company-owned business, you are contemplating to purchase a new machine for $100,000 that will produce a net revenue , after deducting operating expenses, of $10,000 per year. If you are planning to keep the machine running for 4 years, what must the market or resale value be at the end of 4 years to justify the investment? It is a must that you make a 15% annual return on your investment.
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