Parasite Engineering is developing a new product for the parasitic market that services parasites. The opportunity is es

[answerhappygod]

Parasite Engineering
is developing a new product for the parasitic market that services
parasites. The opportunity is estimated to be worth $1.0B measured
in today’s dollars. The company will need to spend $500M 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
$1.5B to move forward. If the appropriate risk-free rate is 2.5%,
how high must the annual volatility be to make the project worth
beginning?