Roche Pharmaceuticals entered into a licensing agreement with Zenith Lab for a new drug under development.Roche will receive $6,750,000 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 should be

a. $6,750,000.

b. $5,737,500.

c. $1,012,500.

d. $0 until approval is received.