Neas-Seminars

Homework #22


http://33771.hs2.instantasp.net/Topic7629.aspx

By StephenMC - 2/29/2008 12:23:12 PM

The problem gives the "expected profit" at its present value as 85 billion.

Isn't p x NPV = p x [Investment - PV(Cash flows)] = expected profit, meaning the answer to Part B was given in the problem?

[NEAS: Expected profit here means the expected payoff to the firm that gets the patent: p * $85 billion - present value of research costs]