Reconsider the research-and-development decision in Figure 3.32. If you decide to continue the project, you will have to come up with the $2 million this year (Year 1). Then there will be a year of wait- (Year 2) before you know if the patent is granted. If you decide to license the technology, you would receive the $25 million distrib- uted as $5 million per year beginning in Year 3. On the other hand, if you decide to sell the product directly, you will have to invest SS ing million in each of Years 3 and 4 (to make up the total investment of $10 million). Your net proceeds from selling the product, then, would be evenly distributed over Years 5 through 9. Assuming an interest rate of 15%, calculate the NPV at the end of each branch of the decision tree. License Technology $25M $23M Patent Awarded p- 0.7 Demand High Continue Development $2M 0.25 $55M S43M Develop Production and Marketing to Sell Product Directly S10M Demand Mediumm -0.55 $33M $21M No Patent-S2M p-0.3 Demand Low p 0.20 $15M - $3M Stop Devel SO Figure 3.32