Bargain Pharma is preparing a business plan for a new cancer treatment, TargetC.$$ They have spent $$1\mathrm{.}5$B on TargetC$$s research and development prior to this decision point.$$ To move forward, a $$450$m plant must be constructed to make the drug.$$ They expect to use land they purchased $10$ years ago for a pet vaccine, at a cost of $$27$m$.$ They are negotiating with generic drug maker, No Name Inc. to sell them this land to net $$42$m if they don$$t use it for the cancer treatment manufacturing.$$ They estimate that $$125,000,000$ is needed to buy raw materials to get the process started and begin selling $$800$m in cancer drugs each year for $20$ years.$$ A $$9$ million advertising launch is planned to build physician and consumer awareness of this unique cancer fighting treatment.$$ With the launch of this product, Bargain's sales of another cancer therapy, CureIt$$will drop by $$250$m per year.$$ However, Bargain Pharma$$s diagnosis kit, to assist physicians in identifying various cancer strains, will sell $$1\mathrm{.}2$m more per year with the introduction of the new drug.$$ To properly analyze this drug launch, you are asked to determine relevant cash flows.

An example of an opportunity cost is:

Multiple Choice

Land purchase $10$ years ago for a pet vaccine

TargetC's research and development

CureIt sales are a lost opportunity

Advertising and Marketing launch

None of these answers are an example of an opportunity cost