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LiveForever Biotechnology Corporation (LFBC) has a new potential drug developed by their research group for which they are planning the marketing....

LiveForever Biotechnology Corporation (LFBC) has a new potential drug developed by their research group for which they are planning the marketing. The plan has three steps: 1) development (gaining approvals and designing processes and packaging), 2) marketing as a proprietary drug (no direct competitors) and 3) marketing as a generic drug. Step 1 is envisioned as happening in 2010, step 2 in years 2011-2014, and step 3 as years 2015 to 2018. The tables below lists the relevant costs and sales forecast. Depreciation will be computed as straight line from 2011 through 2015.

Present value (in 2010) of past research costs $100 million Development (approvals and processes) $10 million (assume that this can not be included in depreciation) COGS (proprietary period) 15% of revenues COGS (generic period) 5% of revenues Machinery Investment $2 million in 2010 Machinery Salvage Value $0.5 million in 2019 Inventory 25% of revenues Accounts receivable 40% of revenues Accounts Payable 15% of revenues Cost of capital 10% Tax Rate 30% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sales Revenue Forecast $0.00 $50.00 $75.00 $125.00 $200.00 $400.00 $150.00 $100.00 $50.00 SG&A $8.00 $5.00 $5.00 $3.00 $1.00 $1.00 $1.00 $1.00 LiveForever Biotechnology Corporation (LFBC) has a new potential drug developed by their research group for which they are planning the marketing. The plan has three steps: 1) development (gaining approvals and designing processes and packaging), 2) marketing as a proprietary drug (no direct competitors) and 3) marketing as a generic drug. Step 1 is envisioned as happening in 2010, step 2 in years 2011-2014, and step 3 as years 2015 to 2018. The tables below lists the relevant costs and sales forecast. Depreciation will be computed as straight line from 2011 through 2015. As an alternative, they could sell the rights to the product to a major pharmaceutical company. Based on this information, what would be the minimum price for which they sell considering past investments and future gains (e.g. the net present value of all investments and potential earnings today)?
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LiveForever Biotechnology Corporation (LFBC) has a new potential drug developed by their research group for which they are planning the marketing. The plan has three steps: 1) development (gaining...

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