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Homework Answers
The present value of new drug is $ 15.92 Million
The explanation is as follows:
| Cash flows | |||||
| Year | in Million $ | PVF @ 12% | Present value | ||
| 1 | 2 | 0.892857 | 1.785714 | ||
| 2 | 2.04 | 0.797194 | 1.626276 | ||
| 3 | 2.0808 | 0.71178 | 1.481072 | ||
| 4 | 2.122416 | 0.635518 | 1.348834 | ||
| 5 | 2.164864 | 0.567427 | 1.228402 | ||
| 6 | 2.208162 | 0.506631 | 1.118723 | ||
| 7 | 2.252325 | 0.452349 | 1.018837 | ||
| 8 | 2.297371 | 0.403883 | 0.92787 | ||
| 9 | 2.343319 | 0.36061 | 0.845024 | ||
| 10 | 2.390185 | 0.321973 | 0.769576 | ||
| 11 | 2.437989 | 0.287476 | 0.700864 | ||
| 12 | 2.486749 | 0.256675 | 0.638286 | ||
| 13 | 2.536484 | 0.229174 | 0.581297 | ||
| 14 | 2.587213 | 0.20462 | 0.529395 | ||
| 15 | 2.638958 | 0.182696 | 0.482128 | ||
| 16 | 2.691737 | 0.163122 | 0.439081 | ||
| 17 | 2.745571 | 0.145644 | 0.399877 | ||
| Present value of New drug | $15.92 Million | ||||
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Help? Need to know how to
punch this in excel/financial calculator as well
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