AstraZeneca is developing a vaccine to combat COVID19
Finance
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AstraZeneca is developing a vaccine to combat COVID19. It expects the first cash inflow from this project to be $525,000 in 6 years’ time and then an inflow will occur every half a year for the next five years. The success of this project results in an expectation of the cash inflows growing at a rate of 11.32% p.a. compounded annually. After the patent on this vaccination expires, the long-term growth rate will drop to zero and the cash inflows will cease. If AstraZeneca requires a return of 16.48% p.a. compounded annually, what is the maximum amount of money they could put into developing this vaccine for it to be worthwhile?
