The employment process is carried out by which department?

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

Svetlanka [38]

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:

$PV = \frac{P}{r-g}*\left [ 1- \left (\frac{1+g}{1+r}\right)^{n}\right]$

Substituting the values we get,

$PV = \frac{2}{0.09-0.02}*\left [ 1- \left (\frac{1+0.02}{1+0.09}\right)^{17}\right]$

$PV = \frac{2}{0.07}*\left [1- 0.323558233\right]$

$PV = 28.57142857 * 0.676441767$

$PV = 19.32690763$

8 0

2 years ago

Connor heard that as a general rule, he should spend no more than one week's pay on rent. If Connor's salary is $29,000 per year

Alja [10]

The answer is D:$558.

3 0

3 years ago

Read 2 more answers

IMB Corporation recently reported an EBITDA of $22.5 million and $5.4 million of net income. The company has $6 million interest

Mandarinka [93]

Answer:

$8.2 million

Explanation:

As per given data

EBITDA $22.5

Net Income $5.4 Million

Interest Expense = $6 million

Tax rate = 35%

As we know the Tax is deducted from the income before tax to calculate the net income. We will calculate the Earning before tax first.

EBT = Net Income x 100% / ( 100% - 35% )

EBT = 5.4 million x 100% / 65%

EBT = $8.3 million

Now we need to calculate the Earning Before interest and Tax

EBIT = EBT + Tax Expense = $8.3 million + $6 million = $14.3 million

The Difference between EBIT and EBITDA is depreciation and amortization expense.

Depreciation and Amortization expense = EBITDA - EBIT = $22.5 million - $14.3 million = $8.2 million

3 0

2 years ago

Montana Mining Co. pays $3,721,000 for an ore deposit containing 1,525,000 tons. The company installs machinery in the mine cost

Paraphin [41]

Answer:

Ore deposit depletion and Mining machinery depreciation Journal entries

Dr Depletion charge (Ore deposits) 405,528

Cr Accumulated depreciation 405,528

Dr Depletion charge (Ore deposits) 23,268

Cr Accumulated depreciation 23,268

Explanation:

Preparation of the year-end entries to record both the ore deposit depletion and the mining machinery depreciation of Montana Mining Co

Depletion of natural resources can be defined as the way in which the cost of natural resources is apportioned upto the period when it will be utilized which is why they are shown at cost in balance sheet.

The entry is to record depreciation charged on ore deposit depletion. Therefore To record this entry we have to debit depletion charges, and credit accumulated depreciation

Dr Depletion charge (Ore deposits) 405,528

Cr Accumulated depreciation 405,528

Computation of depletion cost per unit:

The depletion cost per unit can be calculated by dividing the net cost of the ore with the total units of capacity :

Depletion/units = Cost - Salvage/ Total unit of capacity

$3,721,000/1,525,000 tons

=$2.44

Hence, depletion per unit is $2.44.

Computation depletion amount on ore deposit:

The depletion amount on ore deposit can be calculated by multiplying the cost per depletion unit with the number of units utilized:

Depletion =Cost/Unit ×Units Utilized

$2.44×166,200 tones

=$405,528

Hence, depletion expenses on ore deposit amounts to $405,528.

The pass entry to record depreciation charged on mining machine :

Dr Depletion charge (Ore deposits) 23,268

Cr Accumulated depreciation 23,268

Computation of depreciation cost per unit:

The depletion cost per unit can be calculated by dividing the net cost of the ore with the total units of capacity :

Depletion/units = Cost - Salvage/ Total unit of capacity

$213,500/1,525,000 tons

=$0.14

Hence, depreciation per unit is $0.14.

Computation of depreciation amount on ore deposit:

The depletion amount on ore deposit can be calculated by multiplying the cost per depletion unit with the number of units utilized:

Depletion =Cost/Unit ×Units Utilized

$0.14×166,200 tones

=$23,268

Therefore the depreciation expenses on ore deposit amounts to $23,268

4 0

3 years ago

A(n) __________ refers to a complete ban on importing or exporting of products from a specific country

azamat

An embargo refers to a complete ban <span>on the importing or exporting of products from a specific country.</span>

6 0

3 years ago