What is the terminal value if the development is stopped after clinical trials conducted are successful?
A)$(250)
B)$(400)
C)$1,335
D)$3,455

Question

Quizplus · Accepted Answer

If the development is stopped after successful clinical trials, the terminal value would be the present value of the cash flows from the launch of the product until the end of the product's life cycle. According to the table provided, the present value of cash flows in this scenario would be $400 million, which is highest among the given options. Therefore, option B is the best choice.

What Is the Terminal Value If the Development Is Stopped