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Question 1 Mack Inc. (Mack) is in the early stages of growth post the patent approval of a new migraine drug. The board has recommended
Question 1 Mack Inc. (Mack) is in the early stages of growth post the patent approval of a new migraine drug. The board has recommended that Mack put significant resources towards manufacturing the product in a highly automated ( & expensive) environment with a quick ramp to sales. The board has asked Mack's CFO to prepare a forecast for the next 5 years. Forecast details are below: *For forecasting purposes, expect sales and manufacturing of pills to be identical *Given the highly automated manufacturing environment, Mack expects manufacturing overhead to be lentirely fixed and expects practical capacity of 525 million pills. Assume per pill amounts and total fixed expenses stay flat after 2028. Required 1. What is breakeven in pills assuming the fixed period expenses are $75 million? 2. What is the expected gross margin \% in 2027&2028 ? 3. What is the expected gross margin \% when the plant is at practical capacity? Explain why this is so different than margins in 2027&2028? 4. How might Mack explain or eliminate these vastly different margins when explaining this forecast to the board? Use the discussion from the Anagene case to help with the
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