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Question 1: Present Value Analysis Approximately 23.5 million Americans are addicted to alcohol and other substances, costing the U.S. economy $300 billion in medical expenses

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Question 1: Present Value Analysis Approximately 23.5 million Americans are addicted to alcohol and other substances, costing the U.S. economy $300 billion in medical expenses and lost productivity. Your firm has spent $200 million to date working on a cure for drug and alcohol addiction but is now at a crossroads. It can either abandon its program or invest another $60 million today that will guarantee the discovery of the cure exactly one year from now. Then it will take another three years to get final approval from the Food and Drug Administration so that the drug can be sold. Suppose your firm plans to donate the patent at the end of the tenth year and expects to receive zero profits after that. The firm's opportunity cost is 5.5%. Expected year-end profits from selling the drug are presented in the worksheet "Q1 Calculations" of the provided Excel file. (1) (Calculating) In the worksheet "Q1 Calculations", enter the value of interest rate in column K and the value of current cost in column L (0.1 points), and calculate the net present value of the project in column M using formulas (0.4 points). You may add more rows or columns to facilitate your calculations. (2) (Answering) Based on your calculation results, should your firm invest another $60 million today to bring the drug to the market, or should it abandon the project? Please provide your answers below with some justification. (0.1 points)

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