You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. You expect that the drug’s profits will be $1 million in its first year and that this amount will grow at a rate of 5% per year for the next 16 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the present value of the new drug if the interest rate is 10% per year?

You work for a technology company that has developed a new microchip. The patent on the microchip will last 13 years. You expect that the microchip’s profits will be $1 million in its first year and that this amount will grow at a rate of 4% per year for the next 13 years. Once the patent expires, other technology companies will be able to produce the same microchip, and competition will likely drive profits to zero. What is the present value of the new microchip if the interest rate is 10% per year?

You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last for 17 years. You expect that the drug will produce cash flows of $10 million in its first year and that this amount will grow at a rate of 4% per year for the following 16 years. Once the patent expires, other pharmaceutical companies will be able to produce generic equivalents of your drug and competition will drive any future profits to zero. If the interest rate is 12% per year, then the present value of producing this drug is closest to:a.$71 million.b.None of them.c.$105 million.d.$170 million.e.$87 million

b) An investment grows according to the formula A=P(1+r)nt, where A is the final amount, P is theprincipal, r is the interest rate, n is the number of times compounded per year, and t is the time inyears. If P=5000, r=0.03, n=4, and t=10, find the final amount after 10 years.

A piece of equipment cost a certain factory Rs. 600,000. If it depreciates in value, 15% thefirst year, 13.5 % the next year, 12% the third year, and so on, what will be its value at the endof 10 years, all percentages applying to the original cost?A] 2,00,000B] 1,05,000C] 4,05,000D] 6,50,000

A firm wants to open a new coal mine. The price of coal is very volatile and the projected profits over the next five years are N$100,000, N$250,000, N$10,000, N$200,000, and N$50,000 respectively. After that profits will be a constant Rs. 150,000 per year for the next 20 years at which time the mine closes. If 7% is the appropriate discount rate for the first five years and 8% after that, what is the present value of the mine?