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Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential...

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Finance

Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential "blockbuster" drug before the Food and Drug Administration (FDA) waiting for approval. If approved, Big Cure's blockbuster drug will produce $1 billion in net income for Big Cure. Little Cure has ten separate, less important drugs before the FDA waiting for approval. If approved, each of Little Cure's drugs would produce $50 million in net income for Little Cure. The probability of the FDA approving a drug is 60%.
What is the expected payoff for Big Cure's Blockbuster drug?
A. $50 million
B. $600 million
C. $1 billion
D. $0
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