Use the Table Below to Answer the Following Questions) -Calculate the Annual Cost Incurred for the Second Year

question 58

Multiple Choice

Use the table below to answer the following questions) .
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly
prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit monthly Rx) revenue \$) } & 420 \\\hline \text { Unit monthly Rx) cast \$) } & 150 \\\hline \text { Discount Rate per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D \$) } & 875,000,000 \\\hline \text { Clinical Trials \$) } & 145,000,000 \\\hline & \\\hline\end{array}$$
-Calculate the annual cost incurred for the second year.

• A) $1,224,120,000
• B) $884,520,000
• C) $491,400,000
• D) $638,820,000

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Definitions:

Shoshone

A Native American tribe originally from the western United States, known for their cultural richness and history of resistance.

Meriwether Lewis

An American explorer best known for leading the Lewis and Clark Expedition to explore the western territories of the United States.

William Clark

An American explorer, soldier, Indian agent, and territorial governor, best known for co-leading the Lewis and Clark Expedition to explore the Louisiana Territory and the land west to the Pacific Ocean.