You are the CFO of PharmaceX, a pharmaceutical company that has launched a new drug to cure diabetes. The company has just announced that the new drug has generated earnings for \$2,000,000 in its first year.
Analysts predict that the earnings will grow at a rate of 6% per year for the next 15 years while the drug is covered under patent protection. After that, earnings will grow at a rate of 2%, and continue at this level forever. The interest rate is 8%.
What is the present value of the future earnings generated by the new drug?