Problem 4: Drug Developm A pharmaceutical company has a new drug under dev and would like to know how much profit it might expe The drug has to be tested to pass FDA approval. One h subjects will be tested and the company estimates tha probability that each subject will pass the test is 25 pe FDA will approve the dru if at least 20 out of the 100 Future R&D costs will be etween $3 and $5 million (u distributed}. Advertising costs will run between $12 a uniformly, The total population of potential users of t million. The company expects to gain 8 percent of this drug is successful. {Assume a normal distribution for with a standard deviation of 2 percent.) There is a one chance of a competitor enterin this market, and if it monopoly share will be reduce by 5 to 15 percent (u distributed}. The profit per customer is expected to be