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Genesis Pharmaceutical has developed a new diabetes medication. It estimates that the sales volume during the first year will be 2 0 0 , 0
Genesis Pharmaceutical has developed a new diabetes medication. It estimates that the sales volume during the first year will be
units. The sales volume is projected to grow by each year. The price of each unit is $ during the first year and will
increase by each year. The fixed manufacturing costs for the medication are $ for every units, and the variable
costs are $ per unit. The variable costs will increase by each year due to increased material and labor costs.
a Develop a spreadsheet model to estimate the total profit Genesis Pharmaceutical makes on this medication over the next five years.
Note: Round your answer to decimal places.
Total profit
b Convert the future profits into their net present value. If it costs Genesis Pharmaceutical $ in R&D to develop the
medication, What is the net present value NPV of the year profit assuming a discount rate of
Note: Round your answer to decimal places.
NPV of the total profit
If Genesis Pharmaceutical increases the price of the medication by each year, What is the NPV of the year profit?
Note: Round your answer to decimal places.
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