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:
Reverse engineering
Explanation:
Reverse engineering is one of the most complicated procedures which involves great deal of critical analysis. It’s a process which takes apart a product and then redesign and recreate it. Reverse engineering is the best way to learn other technologies and replicating them effectively. It also involves a great deal of analysis regarding the complete composition and construction.
Matches is the correct term
<span>$41
Given a discount rate, the present value (PV) of money you expect to receive in the future (FV) at a specified interest rate (R) for a specified number of periods (N) is
PV = FV/(1+R)^N
So let's plug in the known values and solve.
PV = 45/(1+0.10)^1
PV = 45/(1.10)^1
PV = 45/1.10
PV = 40.90909091
Rounding to the nearest dollar gives $41</span>
The three key approaches that are needed in entering international
markets include the following; direct investment, exporting and even joint
venturing. These are three key approaches that will complete the space provided
above as this is where the company decide on how a chosen market long dash may
enter.
