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True [87]
3 years ago
15

You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 1717 years. You expect tha

t the​ drug's profits will be $ 5$5 million in its first year and that this amount will grow at a rate of 2 %2% per year for the next 1717 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 %10% per​ year?
Business
1 answer:
jeka57 [31]3 years ago
7 0

Answer:

Present value = $45,185,606

Explanation:

Data:

number of periods(n) = 17 years

First-year profit = $5 million

Growth rate = 2%

Interest rate = 10%

Present value = ?

Solution:

The present value of the growing annuity can be calculated as follows

Formula:

Let's denote

annual interest rate = x

annual growth rate = y

Present value = First-year profit x (\frac{1-(\frac{1+y}{1+x} )^{n} }{x-y} )

Present value = $5,000,000 x (\frac{1-(\frac{1+0.02}{1+0.1} )^{17} }{0.1-0.02} )

Present value = $5,000,000 x 9.03

Present value = $45,185,606

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stepan [7]

Answer:

B

Explanation:

Money has several functions, one of its principal function is using it as unit of account. By comparing the amount in dollars spent on running a car yearly to annual earnings instead of keeping track in terms of gasoline cost and quarts of oil shows that money has been used as a unit of account.

This means that the amount of gasoline gallons bought and quarts of oil has been essentially replaced by the cost of these purchases and hence avail is the power to use money as a unit of account

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3 years ago
The income from what reliable source benefits the entire community by funding essential services and public works?
Flura [38]

The income from property taxes benefits the entire community by funding essential services and public works.

Funding refers back to the money required to start and run a commercial enterprise. it is a financial funding in a agency for product improvement, manufacturing, growth, income and marketing, workplace spaces, and inventory.

Funding is the act of imparting assets to finance a want, application, or challenge. at the same time as that is commonly inside the form of money, it may additionally take the shape of an attempt or time from an enterprise or business enterprise. The main resources of funding are retained profits, debt capital, and fairness capital.

Agencies use retained earnings from business operations to expand or distribute dividends to their shareholders. Companies boost finances by means of borrowing debt privately from a bank or by way of going public (issuing debt securities).

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5 0
2 years ago
If the price of a banana is twice the price of an apple, then the sale of a banana contributes twice as much to GDP as the sale
marysya [2.9K]

Yes this statement is true.

Explanation:

The sale of banana will add the twice contribution in the GDP as because the price is double and the sell of every single unit in the market in comparison of apple is able to add more currency in the economy than a sell of every single unit of apple.

The higher price may affect the sale as people will move to the other alternative but how much sell of banana will take place will able to add more money in the market as compared to apple.

3 0
3 years ago
Versaille company has cost of goods manufactured $325,000, beginning finished goods inventory $150,000, and ending finished good
belka [17]

Calculation of Cost of Goods Sold for Versaille company:


It is given that Versaille Company has the cost of goods manufactured $325,000, beginning finished goods inventory $150,000, and ending finished goods inventory $175,000. The Cost of Goods Sold can be calculated using the following formula;


Cost of Goods Sold = Cost of goods manufactured + beginning finished goods inventory - ending finished goods inventory

= 325,000+150,000-175,000

= $300,000


Hence, the cost of goods sold for Versaille company is <u>$300,000</u>




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3 years ago
Information: You are employed as a network consultant at Network Design Consultants. Your company consists of 15 consultants who
Mkey [24]

The first step in the design process is to find out as much as you can about the organization.

It is not possible to design something for a company if you do not know what will work for the company and what will not.

This is why the first step in the design process is to find out as much as you can about the company in question which in this case is Harrison and Associates.

Some questions you can ask Harrison and Associates include:

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These will help you determine what kind of systems they need so that you can go about finding ways to satisfy these needs.

In conclusion, the first step of the design process is very important because that is where you find out exactly what the client wants so that you can do what you can.

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5 0
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