Bingosol is evaluating an opportunity to develop a new diabetes drug – the opportunity is estimated to be worth $1.2B me

[answerhappygod]

Bingosol is evaluating an opportunity to develop a new diabetes
drug – the opportunity is estimated to be worth $1.2B measured in
today’s dollars. The company will need to spend $250M today to
begin the research. In five years, the company will have to make a
decision as to whether to go into full scale production and begin
selling the drug. At that time, the company estimates it will cost
$2.0B to move forward. If the appropriate risk-free rate is 2.5%,
and the uncertainty as to the value of the opportunity can be
modeled using an annual volatility of 60%, should the company spend
the $250M today on R&D?