SOLUTION: “Dear Dr. Jones, Our pharmaceutical company now received 47 complaints about the new pain reliever NoPain, created in your lab. Of the 47 complaints, 24 said their headache go

Question 1189002: “Dear Dr. Jones,
Our pharmaceutical company now received 47 complaints about the new pain reliever NoPain, created in your lab. Of the 47 complaints, 24 said their headache got worse, 15 said they had severe cramping after taking the medication, and 8 said they had both problems. We have only been distributing this pain reliever for about 30 days and we are very concerned. It has cost our company roughly 1.2 million dollars to create the drug and we have recorded sales of $98,600 in the past month at $10 a bottle, so that is 9,860 bottles. Should we be concerned? Do you think we should pull the product and conduct more research? We may end up losing money on this if we pursue this course of action. Should we keep the product on the shelves and secretly do more research? Or should we just do nothing for the time being, wait it out, and see what happens? Please get back to us as soon as possible with your recommendation.
Thank you,
Jane Smith
Head of Customer Relations
Using your basic mathematical skills, calculate how long it will take the pharmaceutical company to earn back the amount that it had invested, if it continues to sell the product at the current selling rate.”
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
the revenue per bottle is 10 dollars.
the cost they incurred to develop the drug is 1.2 million dollars.
they have already sold 9860 bottles at 10 dollars each for a total revenue of 98,600.

1.2 million minus 98,600 = 1,200,000 - 98,600 = 1,101,400 dollars of investment left to recoup..

at 10 dollars a bottle they would have to sell an additional 110,140 bottles.

they already sold 9860 bottles in 30 days.
that's an average of 9860/30 = 328.666666667 bottles per day.

at that rate, it will take an additional 110,140 / 328.66666667 = 335.1115619 days to sell enough bottles to recoup the investment cost.

that's your solution as best i can determine.

335.1115619 days at 328.666666667 bottles per day = 110,140 bottles.

let me know if you have any questions.

theo

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