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 $235 million to date working on a cure, but is now at a crossroads. It can either abandon its program or invest another $50 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.

What is the net present value of the project?

Instructions:Enter your response rounded to the nearest penny (two decimal places). Use a negative sign (-) where appropriate.

$_________________

Should DAS continue with its plan to bring the drug to market, or should it abandon the project?

Year 1 = $0

Year 2 = $0

Year 3 = $0

Year 4 = $0

Year 5 = $14,300,000

Year 6 = $16,500,000

Year 7 = $19,200,000

Year 8 = $21,900,000

Year 9 = $24,800,000