As Part of a Broad Effort to Invigorate Its Pipeline

question 23

Short Answer

As part of a broad effort to invigorate its pipeline and move more aggressively into biotechnology, GoodDrugs Inc. plans to set up a new division dedicated to developing biotherapeutic drugs and research technologies. The company expects to pay $240 million for set up costs of its new division now and $12 million in operating costs each year for the next 13 years. The company estimates that the new division will be able to generate annual revenue of $84 million 8 years from now. What is the net present worth of this investment if the company's minimum attractive rate of return is 7% per year and the study period is 13 years? Assume there is no salvage value.

---

Definitions:

Artistic Effects Button

A feature in some software applications that applies various visual effects to images or graphics to enhance their appearance.

Pencil Sketch

An artwork or drawing created using pencils, characterized by the use of shading, lines, and textures to represent subjects.

With Previous

A timing option in animations and multimedia presentations, indicating an action to occur simultaneously with the previous animation or action.

On Click

An event trigger in computer programming that activates a function or procedure when an object, such as a button, is clicked.