Question
You work for a large pharmaceutical company. A smaller company, Oncology on Fire (OOF) is dong some promising work in cancer treatment with several products
You work for a large pharmaceutical company. A smaller company, Oncology on Fire (OOF) is dong some promising work in cancer treatment with several products in productions and others in development. Financial statements are attached. Revenues are expected to increase 20% per year for the next 10 years and level out. Expenses are expected to increase by 2% per year. Required: 1. Predict future cash flows for OOF. Explain how you developed your estimates, what assumptions you made, and what additional information you would want. 2. Choose a discount rate. Explain how you got the rate and what additional information you would like to have. (You may need to do an internet search to get the appropriate rate.) 3. Determine the present value of the predicted future cash flows.
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