1) Consider the medication Sovaldi. Marketed by Gilead Sciences for the treatment of hepatitis C, Sovaldi has cure rates of 30% to 97%, depending on the type of hepatitis C virus. In 2014, soon after the drug was approved, the list price for a 12-week course of treatment in the US was $84,000. For many representatives in Congress, this was an outrageous price, causing the U.S. Senate Finance Committee to conduct an eighteen-month investigation into Gileads pricing strategy.

Now consider buying a one-time cure for a debilitating disease like hepatitis C in the same way a prospective car owner buys a car. Just as a Tesla provides the car owner with a perpetual stream of services to drive that car, a cure can be thought of as a perpetual stream of health benefits for the patient to live in a healthy body. From this perspective, we can match the stream of payments with the stream of health benefits, turning the cost into a much more manageable monthly mortgage. Given a set loan term of 10 years and a fixed monthly interest rate of 0.4167%, calculate the monthly payment on a cure that costs $84,000. (Note: Your answer should be expressed to 2 decimal places.)

Monthly payment = $_____

2) LifeWorks owns a drug patent that generates $45 million in licensing fees per year starting at the beginning of this year (year 0). The patent expires in 10 years, after which no licensing fees will be generated (i.e., licensing fee revenues for years 10 and beyond will be $0). The discount rate is 12% per year. What is the present value of the patent's cash flows? (Note: Your answer should be expressed in units of millions of dollars.)

$____ million