A pharmaceutical company is considering whether to invest in a new biotech company which is working on a new vaccine. It

[answerhappygod]

A pharmaceutical company is considering whether to invest in a
new biotech company
which is working on a new vaccine. It estimates that the cost of
the biotech company is
-RM56 million. Purchasing the biotech company would provide the
pharmaceutical
company with an option to own (if it wants to) a much advanced
vaccine technology that
will be available in 4 years. If the pharmaceutical company does
not purchase the biotech
company, it cannot own the advanced vaccine technology.
The advanced vaccine technology will require RM1.5 billion in
cash four years from now.
Currently, the company estimates the net present value (NPV) of
the advanced vaccine
technology to be RM597 million.
Assuming a risk free rate of 10% and that the annual volatility
of the advanced vaccine
technology project to be 35%, should the company invest in the
biotech company?