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 $240 million to date working on a cure, but is now at a crossroads. It can either abandon its program or invest another $65 million today.Unfortunately, the firm's opportunity cost of funds is 6 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.

Year 1$0

Year 2$0

year 3 $0

YEAR 4$0

YEAR 5$13,000,000

YEAR 6$14,200,000

YEAR 7$16,800,000

YEAR 8$19,400,000

YEAR 9$23,500,000