Assume you are the CEO of a company that has invested $5 billion in a COVID vaccine, but the vaccine is not quite finished. At a recent company meeting, one of your colleagues reports that there have been other vaccines coming on the market, and these are expected to reduce the sales of your vaccine to $3 billion. If it would cost you $1 billion to finish the development of the vaccine and make the product, should you go ahead and do so? What is the most you should pay to complete the vaccine?

Assume you are the CEO of a company that has invested $5 billion in a COVID vaccine, but the vaccine is not quite finished. At a recent company meeting, one of your colleagues reports that there have been other vaccines coming on the market, and these are expected to reduce the sales of your vaccine to $3 billion. If it would cost you $1 billion to finish the development of the vaccine and make the product, should you go ahead and do so? What is the most you should pay to complete the vaccine?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You and a coworker are assigned a team project on which your likelihood or a promotion will be decidedon. It is now the night before the project is due and neither has yet to start it. You both want toreceive a promotion next year, but you both also want to go to your company’s holiday party that night.Each of you wants to maximize his or her own happiness (likelihood of a promotion and mingling withyour colleagues “on the company’s dime”). If you both work, you deliver an outstanding presentation.If you both go to the party, your presentation is mediocre. If one parties and the other works, yourpresentation is above average. Partying increases happiness by 25 units. Working on the project addszero units to happiness. Happiness is also affected by your chance of a promotion, which is depends on howgood your project is. An outstanding presentation gives 40 units of happiness to each of you; an aboveaverage presentation gives 30 units of happiness; a mediocre presentation gives 10 units…
Quick answer please If you are currently a worker earning $60,000 per year but are considering becoming an entrepreneur. You will not switch unless you earn an accounting profit that is on average at least as great as your current Salary. You look into opening a small grocery store. Suppose that the store has annual cost of $150,000 for labor, $60,000 for rent and $30,000 for equipment. There is one-half probability that revenues will be $20,000 and a half probability that revenue will be $420,000 a. WHat is your accounting and economic profit?
#4. Without a vaccine, there is a 10% chance that Steven will get the coronavirus in 2021. If he gets vaccinated, that risk falls to 1%. Without a vaccines, Steven gets -6000 utils if he gets covid and 0 utils if he stays healthy. Because of side effects, he gets -100 utils from the vaccine if he stays healthy and -6100 if he gets sick anyways. What will Steven do? a. He will get vaccinated b. He will not get vaccinated c. He will get vaccinated if he is risk-averse but not if he is risk-loving d. He will get vaccinated if he is risk-loving but not if he is risk-averse
Suppose, unfortunately, your mathematics andeconomics professors have decided to give teststwo days from now and you can spend a total ofonly twelve hours studying for both exams. Aftersome thought, you conclude that dividing yourstudy time equally between each subject will giveyou an expected grade of C in each course. Foreach additional three hours of study time for oneof the subjects, your grade will increase one letterfor that subject, and your grade will fall oneletter for the other subject.48 PART 1 • Introduction to EconomicsCopyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.a.…
A firm plans to expand its product line and faces a dilemma whether to build a small or largefacility to produce new products. If it builds a small facility and demand is low, the NPV afterdeducting for building costs will be four hundred thousand pesos. If demand is high, the firm caneither maintain the small facility or expand it. Expansion would have an NPV of four hundredfifty pesos while maintaining the small facility would have an NPV of fifty thousand pesos. If alarge facility is built and demand is high, the estimated NPV would be eight hundred thousandpesos. If demand turns out to be low, the NPV would be a loss of ten thousand. The probabilitythat the demand is high is estimated to be sixty percent.a. Analyze using a decision tree.b. Compute for EVPI.c. Determine the range over which each alternative would be best in terms of the valuewhen demand is low.
Dataware is trying to determine whether to give a $10 rebate, cut the price $6, or have no price change on a software product. Currently, 40,000 units of the product are sold each week for $45 apiece. The variable cost ofthe product is $5. The most likely case appears to bethat a $10 rebate will increase sales 30%, and half of all people will claim the rebate. For the price cut, the most likely case is that sales will increase 20%.a. Given all other assumptions, what increase in sales from the rebate would make the rebate and price cut equally desirable?b. Dataware does not really know the increase in sales that will result from a rebate or price cut. However, the company is sure that the rebate will increase sales by between 15% and 40% and that the pricecut will increase sales by between 10% and 30%.Perform a sensitivity analysis that could be used to help determine Dataware’s best decision.
A physician purchases a particular vaccine on Monday of each week. The vaccine diust be used within the week following, otherwise it becomes worthless. The vaccine costss $ 2 per dose and the physician charges $ .4 per dose. In the past 50 weeks, the physician has administered the vaccine in the following quantities : Doses per Week Number of Weeks 20 25 15 50 25 60 On the basis of EMV, find how many doses the physician must purchase each week to maximise his profits ?
Suppose you run a marketing survey and find you have two types of customers high-value customers willing to pay 16 and low-va consumers willing to pay just 10. Your survey tells you that there are equal numbers of high- and low- value customers. Obviously , have two possible options price high (16) and sell only to the high value group, or price low (10) and sell to everyoneThe costs incurred is 5 per unit and sales only happen to high -value consumers 50 % of the timeWhich price should you choose ? Select the correct response price high price low it depends price both high and low
Please help me with this carefully. Thank you.
1. If you are trying to use a RDD setup to evaluate the effect of health insurance on health, and you qualify for a health insurance subsidy if your family income is below $20,000. What's the running variable? What's treatment, and what's the outcome?
Your firm must decide whether or not to introduce a new product. If you introduce the new product, your rival will have to decide whether or not to clone the new product. If you don’t introduce the new product, you and your rival will earn $1 million each. If you introduce the new product and your rival clones it, you will lose $5 million and your rival will earn $20 million (you have spent a lot on research and development, and your rival doesn’t have to make this investment to compete with its clone). If you introduce the new product and your rival does not clone, you will make $100 million and your rival will make $0. 1. Set up the extensive form of this game. 2. Should you introduce the new product? 3. How would your answer change if your rival has “promised” not to clone your product? 4. What would you do if patent law prevented your rival from cloning your product?
You are the manager of an organization in America that distributes blood to hospitals in all 50states and the District of Columbia. A recent report indicates that nearly 50 americans contractHIV each year through blood transfusions. Although every pint of blood donated in the unitedstates undergoes a battery of nine different test, existing screening methods can detect only theantibodies produced by the bodyâ€™s immune system-not foreign agents in the blood, newlyinfected HIV donors can pass along the virus through blood that has passed existing screeningtests. Happily, researchers have developed a series of new tests aimed at detecting and removinginfections from donated blood before it is used in transfusions. The obvious benefit of these testsis reduced incidence of infection through blood transfusions. The report indicates that the currentprice of decontaminated blood is $60 per pint. However, if the new screening methods areadopted, the demand and supply for…