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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 14 million Americans are addicted to drugs and alcohol. The federal government estimates that these addicts cost the U.S. economy $300 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 $200 million to date working on a cure, but is now at a crossroads. It can either abandon its program or invest another $60 million today. Unfortunately, the firm's opportunity cost of funds is 5 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 (year-end) profits from selling the drug are presented in the accompanying table.
\table[[Year 1,Year 2,Year 3,Year 4,Year 5,Year 6,Year 7,Year 8,Year 9],[$0,$0,$0,$0,$12,300,000,$14,100,000,$16,500,000,$18,300,000,$21,300,000
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