Question 15 Dresden Pharmaceuticals has decided to go ahead and start clinical t

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Question 15 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. Calculate the market size for the second year Not yet Points out of 1 Flag question resden Pharmaceuticals ata Market Size 000,000 20 nit (monthly Rx) revenue (S) nit (monthly Rr) cost (S) iscount Rate (per cent 150 roject Costs D (S) linical Trials (S) 75,000,000 145,000,000 Select one O a. 3,000,000 O b.273,000 c. 3,244,800 O d. 3,120,000

Explanation / Answer

CURRENT MARKET SIZE = 3000000

EXPECTED TO GROW BY 4% EVERY YEAR

SO SECOND YEAR MARKET SIZE = 3000000(1+0.04) = 3120000

ANSWER : d : 3,120,000 (THUMBS UP PLEASE)

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