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Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential blockbuster drug before the Food and Drug Administration (FDA) waiting
Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential "blockbuster" drug before the Food and Drug Administration (FDA) waiting for approval. If approved, Big Cure's blockbuster drug will produce $1 billion in net income for Big Cure. Little Cure has ten separate, less important drugs before the FDA waiting for approval. If approved, each of Little Cure's drugs would produce $150 million in net income for Little Cure. The probability of the FDA approving a drug is 30%. What is the expected payoff for Big Cure's Blockbuster drug? O A. $300 million OB. $1 billion O C. $ 150 million OD. $0 Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential "blockbuster" drug before the Food and Drug Administration (FDA) waiting for approval. If approved, Big Cure's blockbuster drug will produce $1 billion in net income for Big Cure. Little Cure has ten separate, less important drugs before the FDA waiting for approval. If approved, each of Little Cure's drugs would produce $150 million in net income for Little Cure. The probability of the FDA approving a drug is 30%. What is the expected payoff for Big Cure's Blockbuster drug? O A. $300 million OB. $1 billion O C. $ 150 million OD. $0
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