After extensive marketing research, Pill Medicine Ltd. Believes it can penetrate the pain relieve... After extensive marketing research, Pill Medicine Ltd. Believes it can penetrate the pain reliever market. It can follow one of two strategies. The first is to manufacture a medication aimed at relieving headache pain. The second strategy is to make a pill designed to relieve headache and arthritis pain. Both products would be introduced at a price of $8.35 per package in real terms. The headache and arthritis remedy would probably sell 4.5 million packages per year, while the headache only medication is projected to sell 3 million packages per year. Cash costs of production in the first year are expected to be $4.15 per package in real terms for the headache-only brand. Production costs are expected to be $4.65 in real terms for the headache and arthritis pill. All prices and costs are expected to rise at the general inflation rate of 2%. Either strategy would require further investment in plant. The headache-only pill could be produced using equipment that would cost $23 million, last three years, and have no resale value. The machinery required to produce the headache and arthritis remedy would cost $32 million and last three years. At this time the firm would be able to sell it for $1 million in real terms. The production machinery would need to be replaced every three years at constant real costs. Suppose that for both projects the firm will use a CCA rate of 25%. The firm faces a corporate tax rate of 35%. Management believes the appropriate real discount rate is 7%. Which pain reliever should the company produce?