Roche pharmaceuticals entered into a licensing agreement


Roche Pharmaceuticals entered into a licensing agreement with Zenith Lab for a new drug under development. Roche will receive $6,750,000 if the new drug receives FDA approval. Based on prior approval, Roche determines that it is 85% likely that the drug will gain approval. The transaction price of this arrangement should be

a.   $6,750,000.

b.   $5,737,500.

c.   $1,012,500.

 

d. $0 until approval is received.

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Financial Accounting: Roche pharmaceuticals entered into a licensing agreement
Reference No:- TGS01107161

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