Hansen Pharmaceuticals is considering development of a potential new drug. Testing will cost $31 million today. If the tests are successful, the company will invest $110 million into production and final development starting one year from now. Following that investment, the drug should produce cash flows of $61 million per year for the next 9 years.

What is the NPV of this project, assuming the appropriate discount rate is 20% and the initial tests have a 40% chance of success?

NPV = $

Suppose Hansen Pharmaceuticals has the option to sell their research for $1 million in the event of an unsuccessful test. What is the value of this option to abandon?

Option to Abandon = $

don't round steps, 2 decimal answers