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Luzzo Pharmaceuticals is considering the introduction of a new recently approved drug. You are an equity analyst and you are trying to estimate the value

  1. Luzzo Pharmaceuticals is considering the introduction of a new recently approved drug. You are an equity analyst and you are trying to estimate the value of this drug to the company. You are aware of the following information. Which of the following pieces of information are NOT relevant to determining whether to take the project?

    A.

    Luzzo spent $15 million developing the drug.

    B.

    The cost to produce the drug is 5% of sales price.

    C.

    None of the above.

    D.

    Luzzo expects the sales of the new product to generate $1 million worth of revenue in 2015.

    E.

    Luzzos cost of capital for this project is assumed to be 15%.

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