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 54 million in its first year and that this amount will grow years. the companies will be same drug and competition likely dive a 4% per year the next profits to zero What is the present value of the new drug if the interest rate is 11% per year? The present value of the new drug is milion (Round to three decimal places)

Consider two interest rate scenarios for investing over next 20 years. In steady scenario A, you get interested of 4% each year. In choppy scenario B, in the first year you get that rate plus 10% but then in next year get that rate minus 10% and so forth. The average rate is the same in each scenario. But for an initial investment of $4000, how much more is A worth than B at the end of the period?

You are thinking of buildinga new machine that will save you $5,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 1% per year forever. What is the present value of the savings if the interest rate is 6% per year? The present value of the savings is $. (Round to the nearest dollar.) -12.. Ereen Sho 529.00 O Time Remaining: 00:25:34 Next etv DD DIL 80 888 FR F7 F6 F5 F4 esc F2 F3 & 2$ % @ #3 7 8. 2 3 4 P Y U W E R Q

A real estate property is on the market.  You have estimated it will give you net cash flows of $5136 per month.  You hope to sell it in 9 years for $308182. Your required return is 9.46%, how much should you be willing to pay for the property today?  Answer:

You are considering opening a new plant. The plant will cost $96 million upfront. After that, it is expected to produce constant profits at the end of every year (the first profits arrive at t=1). The cash flows are expected to last forever. The discount rate is 7%. At what profits amount would you breakeven in the plant investment?

Beckham Corp. is considering an investment which should be worth $600,000 10 years from now when it earns 7% compounded annually.Question: Rounding to the nearest whole dollar, what is the most Beckham should pay today for this investment?

Suppose you have $10,000 and  a choice of two alternatives: A) put the money in a savings account that pays 4% per year, and B) buy a stock that has a 50% chance to gain 15% in value after 1 year, and a 50% chance to lose 5%. What will be the expected return for either alternative, and which one would you choose? Why?