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A pharmaceutical manufacturer has projected net profits for a new drug that is being released to...

A pharmaceutical manufacturer has projected net profits for a new drug that is being released to the market over the next five years:

Year 1 2 3 4 5

Net Profit

($300,000,000) ($145,000,000) $50,000,000 $125,000,000 $530,000,000

A fixed cost of $80,000,000 has been incurred for research and development (in year 0). Use a spread-sheet to find the net present value of these cash flows for a discount rate of 3%.

Explain steps pleace

Solutions

Expert Solution

NPV = Present Value of cash inflow - Present Value of Cash outflow

Present value of cash outflow = $ 80,000,000

Present Value of cash inflow =

Show formula

jeff jeffy answered 1 year ago
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