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A biotech drug company is considering investing $2 million today in an experimental new vaccine. If it is successful, it can be sold off in
A biotech drug company is considering investing $2 million today in an experimental new vaccine. If it is successful, it can be sold off in 1 year to a large pharmaceutical company for $100 million. If the vaccine fails it will be worthless. There is only a 2% chance that it succeeds. If the required return is 15%, what is the NPV of this investment?
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