The AAA Pharmaceuticals Corporation is considering investing in developing a drug that cures the common cold. A corporate planning group, has recommended that the firm go ahead with the test and development phase. This preliminary phase will last one year and cost $1 billion. Furthermore, the group believes that there is a 60% chance that tests will prove successful. If the initial tests are successful, AAA Pharmaceuticals can go ahead with full-scale production. This investment phase will cost $1,500 million. Production will occur over the next 9 years. There is 80% probability that sales are 2 billion per year and a 20% that is only 600 million per year Tax is 34%, fixed cost 100 million a year, variable cost is 20% of sales, depreciation is fixed 150 million per year. Cost of capital 10% Should AAA Pharmaceuticals invest in the project? Calculate the NPV for the two scenarios.