Modify Acrons model so that sales increase, then stay steady, and finally decrease. Specifically, assume that the
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Modify Acron’s model so that sales increase, then stay steady, and finally decrease. Specifically, assume that the gross margin is $1.2 million in year 1, then increases by 10% annually through year 6, then stays constant through year 10, and finally decreases by 5% annually through year 20. Perform a sensitivity analysis with a two-way data table to see how NPV varies with the length of the increase period (currently 6 years) and the length of the constant period (currently 4 years). Comment on whether Acron should pursue the drug, given your results.
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Related Book For
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright
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