4. A university owns the rights to a clinical patent. The stipulated payments derived from the patent are $ 10,000 per year, starting at the end of this year, and then decrease by 5% per year for the rest of the patent's life, which is 15 years. A pharmaceutical company offers to purchase the patent rights from the university for a one-time payment of $ 174,642 to be made at the end of year 10. Find the Internal Rate of Return on this offer from the perspective of the university, and from the perspective of the pharmaceutical company
4. A university owns the rights to a clinical patent. The stipulated payments derived from the patent are $ 10,000 per year, starting at the end of this year, and then decrease by 5% per year for the rest of the patent's life, which is 15 years. A pharmaceutical company offers to purchase the patent rights from the university for a one-time payment of $ 174,642 to be made at the end of year 10. Find the Internal Rate of Return on this offer from the perspective of the university, and from the perspective of the pharmaceutical company
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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4. A university owns the rights to a clinical patent. The stipulated payments derived from the patent are $ 10,000 per year, starting at the end of this year, and then decrease by 5% per year for the rest of the patent's life, which is 15 years. A pharmaceutical company offers to purchase the patent rights from the university for a one-time payment of $ 174,642 to be made at the end of year 10. Find the
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