Answer: The present value of the new drug is $19.33 million
We follow these steps to arrive at the answer:
Expected Revenues from the drug in year 1(P) $2 million
Growth Rate (g) 2% p.a.
No. of years (n) 17 years
Discount rate (r) 9% p.a.
Since the revenues are expected to grow at a constant rate of 2% p.a, we can treat this series of cash flows as a <u>growing annuity. </u>
We calculate the Present Value of a growing annuity with the following formula:
![PV = \frac{P}{r-g}*\left [ 1- \left (\frac{1+g}{1+r}\right)^{n}\right]](https://tex.z-dn.net/?f=PV%20%3D%20%5Cfrac%7BP%7D%7Br-g%7D%2A%5Cleft%20%5B%201-%20%5Cleft%20%28%5Cfrac%7B1%2Bg%7D%7B1%2Br%7D%5Cright%29%5E%7Bn%7D%5Cright%5D)
Substituting the values we get,
![PV = \frac{2}{0.09-0.02}*\left [ 1- \left (\frac{1+0.02}{1+0.09}\right)^{17}\right]](https://tex.z-dn.net/?f=PV%20%3D%20%5Cfrac%7B2%7D%7B0.09-0.02%7D%2A%5Cleft%20%5B%201-%20%5Cleft%20%28%5Cfrac%7B1%2B0.02%7D%7B1%2B0.09%7D%5Cright%29%5E%7B17%7D%5Cright%5D)
![PV = \frac{2}{0.07}*\left [1- 0.323558233\right]](https://tex.z-dn.net/?f=PV%20%3D%20%5Cfrac%7B2%7D%7B0.07%7D%2A%5Cleft%20%5B1-%200.323558233%5Cright%5D)
Answer:
expected cost = $2800 per month
Explanation:
given data
Copies (per month) = 4,000
probability = 40%
copies (per month) = 9,000
probability = 60%
lease new copier = $1,050
variable cost = $0.25
to find out
What is the expected cost
solution
we know that expected cost is here
expected cost = fixed cost + variable cost .................1
and here demand of copies per month is express as
= ( 40 % of 4000 ) + ( 60% of 9000 )
= 1600 + 5400 = 7000
so from equation 1
expected cost = fixed cost + variable cost
expected cost = 1050 + 0.25 × 7000
expected cost = 1050 + 1750
expected cost = $2800 per month
It will take the account holder 15 weeks to come up with a principal balance of $2325.
How?
Principal Balance - Initial Balance: $2325 - $450 = $1875
The account holder needs $1875 more in order to come up with the total principal balance of $2325.
$1875 / Weekly Deposits: $1875 / $125 = 15 Weeks
Answer:
2.86 Q + 2,170 = overhead cost
Explanation:
![\left[\begin{array}{ccc}High&4,200&14,182\\Low&2,300&8,748\\Diference&1,900&5,434\\\end{array}\right]](https://tex.z-dn.net/?f=%5Cleft%5B%5Cbegin%7Barray%7D%7Bccc%7DHigh%264%2C200%2614%2C182%5C%5CLow%262%2C300%268%2C748%5C%5CDiference%261%2C900%265%2C434%5C%5C%5Cend%7Barray%7D%5Cright%5D)
We subtract one activity level from another, the result is telling us that 1,900 units generate 5,434 additional cost
That is variable cost we divide and get the unit variable cost
cost 5434 / Unis 1900 = variable cost 2.86
Next we calcualte the fixed cost on any of both
Total Cost 14182
Variable -12012 (4,200 x 2.86)
Fixed Cost 2170
Total Cost 8748
Variable 6578 ( 2,300 x 2.86)
Fixed Cost 2170
the cost equation would be:
2.86 Q + 2,170 = overhead cost
Roselyn's project is in the PLANNING phase of the project management. Project management generally are divided into six stages, which are: definition, initiation, planning, execution, monitoring and control and closure. The project planning stage is the phase in the project life cycle, that involves creating set of plans that will guide the overall execution of the project.
