Question: 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 shield 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 $170 million to date working on a cure, but is now at a crossroad. It can either abandon its program or invest another $30 million today. Unfortunately, the firm’s opportunity cost of funds is 7 percent and I 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 accompany table. Should DAS continue with its plan to bring the drug to market, or should it abandon the project? Explain.