19. (Cash- flow analysis) The Long- Life Company has a new vaccine. The company estimates that it has a 10- year monopoly for the production of the vaccine, and it is trying to estimate how many vaccines it should try to sell annually.

Machines to produce the new vaccine cost $70 million, have a 5- year life, straight- line depreciation, and a zero salvage value. Each machine is capable of producing 75,000 doses annually. Annual fixed costs for producing the vaccine are $50 million, and the variable costs per dose is $1,000. The company’s discount rate for this type of vaccine is 15%, and its corporate tax rate is 30%.

The total market for the vaccine could be as high as 1,000,000 annually.