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Stewart Pharmaceuticals Corporation is considering investing in the development of a drug that cures the common cold. The investment phase will cost $1.6 Billion. Production
Stewart Pharmaceuticals Corporation is considering investing in the development of a drug that cures the common cold. The investment phase will cost $1.6 Billion. Production will occur over the next 4 years. Total cost of goods sold is $4.8 Billion dollars every year. Tax rate is 34% and interest rate is 10%. If the plan is to sell 700 million doses per year, find the break even price.
a) What are the cashflows from operations needed to reach the breakeven?
b) What is the breakeven level of sales?
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