1. Assume that in 2021, the company is now in production of an insulin pill and that its product inventory is progressively becoming more expensive over the next 3 years (at a rate of twice inflation); thereafter (ie., 4 years on), it is expected that costs will be falling consistently. It is expected that the company will be able to sell most of its inventory for a sizeable profit over the next few years.

The pill itself is contracted to sell for $4.00/ capsule over the next 5 years, while the unit cost (variable cost) of each insulin pill is expected to cost $2.00 in 2021. It is expected that Oramed Pharmaceuticals will be able to sell 2,000,000 pills/ year for the next 5 years.

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Oramed Pharmaceuticals is under pressure by shareholders to increase profits in the calander year of 2021 - 2023, explain and quantify, where possible, what you would do, as CFO, of the company