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Determine the transaction price of the arrangement

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Reference no: EM131700990

Question - Swifty Biotech enters into a licensing agreement with Pang Pharmaceutical for a drug under development. Swifty will receive a payment of $10,300,000 if the drug receives regulatory approval. Based on prior experience in the drug-approval process, Swifty determines it is 90% likely that the drug will gain approval and a 10% chance of denial.

Determine the transaction price of the arrangement for Swifty Biotech.

Reference no: EM131700990

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