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.

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Definitions:

Passionate Love

An intense emotional state characterized by romantic attraction, physical desire, and an overwhelming fascination with another person.

Collectivist Societies

Societies that prioritize the needs and goals of the group over the individual, emphasizing community and cooperation.

Arranged Marriages

Marriages where the spouses are selected by individuals other than the people getting married, often based on considerations like family ties, social status, and cultural norms.

Anxious-Ambivalent Attachment

A type of insecure attachment where individuals often feel worried about their relationships and seek constant reassurance and attention from their attachment figure.