Question: Please show work Leland Pharmaceuticals develops both over-the counter (OTC) and prescription medicines, it is organized into two divisions, which are evaluated as investment centers.

Please show work
Please show work Leland Pharmaceuticals develops both over-the counter (OTC) and prescription
medicines, it is organized into two divisions, which are evaluated as investment
centers. The cost of capital used in evaluating the divisions is 6
percent A local engineering firm has developed and patented a process that
significantly shortens packaging times and costs. The engineering firm has offered to

Leland Pharmaceuticals develops both over-the counter (OTC) and prescription medicines, it is organized into two divisions, which are evaluated as investment centers. The cost of capital used in evaluating the divisions is 6 percent A local engineering firm has developed and patented a process that significantly shortens packaging times and costs. The engineering firm has offered to either sell the patent to Leland's OTC Diviston or lease the exclusive rights to the process. (The process is not usable in the Prescription Division). The lease (and the estimated economic ilfe of the process) is eight years. If purchased, the technology would cost $4.0 miltion. An eight year lease would require annual payments of $1,020.000. The division manager of OTC estimates that annual income using the process (before considering any depreciation or lease payments) would be $18 million. The investment for OIC (before considering any lmpect from the new technology) is $72 million. Assume that the patent would be amortized on a straight-line basis if purchased Ignore any income tax effects. Required: a. Suppose the manager of OYC is evaluated using return on investment (ROD). Will the manager prefer to lease or purchase the technology? b. Suppose the manacger of OTC 15 evaluated using residual income. Will the manager prefer to lease or purchase the technology? c. Suppose the manager of OTC is evaluated using return on imestment (RO1). What is the lease payment that would make the manager indifferent between leasing and purchasing the technology? d. Suppose the manager of orCis evaluated using residual income. What is the lease payment that would make the manager indifferent between leasing and purchasing the tecthology? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Suppose the manager of OTC is evaluated using return on investment (ROI). Will the manager prefer to lease or purchase the technology? Notes Enter your answers as a percentage rounded to 2 decimal places (1.e4,32.12). Complete this question by entering your answers in the tabs below. Suppose the manager of OTC is evaluated using reskual income. Will the manager prefer to lease or purchase the technology? Note: Enter your answers in thousands of dollars. Complete this question by entering your answers in the tabs below. Suppose the manager of OTC is evaluated using return on investment (ROI). What is the lease payment that would make the manager indifferent between leasing and purchasing the technology? Note: Do not round intermediate calculations. Enter your answer in thousands of dollars rounded to the nearest whole dollar Complete this question by entering your answers in the tabs below. Suppose the manager of OTC is evaluated using residual income. What is the lease payment that would make the manager indifferent between leasing and purchasing the technology? Note: Enter your answer. In thousands of dollars. Round your final answer to the nearest whole dollar amount

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