Use the table below to answer the following question(s).

Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to $145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 6 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed.

Dresden Pharmaceuticals Data Market Size 3,000,000 Unit (monthly Rx) revenue ($) 420 Unit (monthly Rx) cost ($) 150 Discount Rate ( per cent) 8 Project Costs R&D ($) 875,000,000 Clinical Trials ($) 145,000,000

Calculate the net present value for Dresden's new drug.

$3,027,826,233

$(696,200,655.39)

($339,600,000)

$ 2,865,592,135.35