In this example, we are estimating the net present value of introducing a new drug to market. We have the following information about the market:
· The market size is 1,000,000 and is projected to grow at an average of 5%, with a standard deviation of 1%, over the next ten years.· The market share captured at entry is projected to be between 20% and 70%, with most likely value 40%.· Three competitors may enter the market in the future, with each one having a 40% probability of entry per year.· For each new competitor per year, the market share goes down by 20%.· The marginal profit per unit is $1.80.· We want to evaluate the project over ten years, using a discount rate of 10%.
Suppose this new drug will cost $3 million to develop. What is the chance that we could lose money on this project?
What will be an ideal response?
The output graph below shows there is nearly a one in three chance (28.5%) that this project could lose money if the development costs are $3 million.
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______ cultures focus on supporting employees’ strengths, increasing morale, and providing rewards for good work.
What will be an ideal response?
Recognizing tax benefits in a loss year due to a loss carryforward requires
a. only a footnote disclosure. b. creating a new carryforward for the next year. c. creating a deferred tax asset. d. creating a deferred tax liability.
Nell is considering forms of business organization for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for A) their own wrongful acts
B) any partnership obligation. C) their own and other partners' wrongful acts. D) none of the choices.
Employers that strike a healthy work–life balance ____________________
a. pay more. b. accept lower profit margins. c. have employees that are more likely to act ethically. d. have employees who have quicker career promotion paths.