Question
Biotech sold a patent on a new blood analyzer to Pharma. The sales agreement which was signed on January 1, 2018 requires Pharma to pay
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Biotech sold a patent on a new blood analyzer to Pharma. The sales agreement which was signed on January 1, 2018 requires Pharma to pay Biotech $1 million immediately. In addition, Pharma is required to pay $700,000 December 31 of each year for 20 years starting with December 31, 2018. Pharma and Biotech judge that 10% is an appropriate discount rate for this arrangement.
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Compute the present value of the receivable on Biotechs books on January 1, 2018 immediately after receiving the $1 million down payment.
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Calculate the present value of the receivable on Biotechs books on December 31, 2018. Please show amortisation table.
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Determine the present value of the receivable on Biotechs books on December 31, 2019.
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Finance And Sustainability
Authors: Karolina Daszyńska-Żygadło, Agnieszka Bem, Bożena Ryszawska, Erika Jáki, Taťána Hajdíková
1st Edition
