Allergan is a major pharmaceutical firm. You work for Allergans CFO and are evaluating a major and expensive drug trial. The drug trial would require an investment of $95 million today If the trial succeeds, the drug will be worth $1 billion in a year. You estimate that there is only a 10% chance that the trial succeeds. If the trial fails, then in a year you will scrap the project and it will be worth nothingthe entire $95 million will be gone. Whether the venture succeeds or fails is independent of general market conditions. The risk-free rate is 3%, the expected return of the market is 12%, and the standard deviation of the market return is 20%. Ignore taxes.

What is the NPV of the project? What is the beta of the drug trial? What is the appropriate discount rate for the project under the assumptions of CAPM?