Roche Pharmaceuticals entered into a licensing agreement with Zenith Lab for a new drug under development. Roche will receive $8,100,000 if the new drug receives FDA approval. Based on prior approval, Roche determines that it is 85% likely that the drug will gain approval. The transaction price of this arrangement, using the most likely outcome approach, should be

a. $6,885,000.

b. $8,810,000.

c. $1,215,000.

d. $0 until approval is received.