Dresden Pharmaceuticals has decided to go ahead and start

Last updated: 8/4/2023

Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug The total R D costs are estimated to reach around 875 000 000 with clinical trials mounting to 145 000 000 The current market size is estimated to be around 3 000 000 and is expected to grow at 4 percent every year The market share Dresden hopes to capture in the first year is 7 percent and is projected to grow by 25 percent each year for the next 4 years A monthly prescription is anticipated to generate revenue of 420 while incurring variable costs of 150 A discount rate of 8 percent is assumed 2 A Dresden Pharmaceuticals 4 Market Size 5 Unit monthly Rx revenue 6 Unit monthly Rx cost S 7 Discount Rate per cent 8 9 10 R D 11 Clinical Trials Data O 1 149 876 000 O 1 494 838 800 O 2 373 996 000 Project Costs B 3 000 000 420 150 8 875 000 000 145 000 000 Calculate the projected profit for the third year