Crane Pharmaceuticals entered into a licensing agreement with Zenith Lab for a new drug under development. Crane will receive

$$8650000$ if the new drug receives FDA approval. Based on prior approval, Crane determines that it is $85\%$ likely that the drug will

gain approval. The transaction price of this arrangement is

$$8650000$

$$7352500$

$$1297500$

$$0$ until approval is received.