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Approximately 1 4 million Americans are addicted to drugs and alcohol. The federal government estimates that these addicts cost the U . S . economy
Approximately million Americans are addicted to drugs and alcohol. The federal government estimates that these addicts cost the US economy $ billion in medical expenses and lost productivity. Despite the enormous potential market, many biotech companies have shied away from funding research and development R&D initiatives to find a cure for drug and alcohol addiction. Your firm Drug Abuse Sciences DAS is a notable exception. It has spent $ million to date working on a cure, but is now at a crossroads. It can either abandon its program or invest another $ million today. Unfortunately, the firm's opportunity cost of funds is percent and it will take another five years before final approval from the Federal Drug Administration is achieved and the product is actually sold. Expected yearend profits from selling the drug are presented in the accompanying table.
tableYear Year Year Year Year Year Year Year Year $$$$$$$$$
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