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Use the Table Below to Answer the Following Questions) -Calculate the Projected Sales for the First Year

question 60

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 projected sales for the first year.

Definitions:

Monopoly

A market structure characterized by a single seller or producer dominating the entire market, lacking competition in the supply of its goods or services.

Willingness To Pay

The highest price a consumer is willing to pay for a product or service, indicating its worth to them.

Price Discrimination

A pricing strategy where identical or very similar goods or services are sold at different prices by the same provider in different markets or to different customers, based on differences in price sensitivity.

Monopolist

An individual or entity that is the sole provider of a particular good or service, possessing significant control over market prices and output.