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You work for a pharmaceutical company that has developed a new drug. The patent on...

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Accounting

You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last for 20 years. You expect that the drug will producc cash flows of $10 million in its first ycar and that this amount will grow at a rate of 3% per year for the following 19 years. Once the patent expires, other pharmaceutical companies will be able to produce generic equivalents of your drug and competition will drive any future profits to zero. If the intenest rate is 10% per year, then the present value of producing this drug is closest to:
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