Understanding Present Value $-$ End of Appendix Problem

The drug company Pizer is considering whether to irrest in the development of a new cancer drug, Development will require an initial investment of $$10$ millios now, and, beginning ooe year from now, the drug will generate annual profise of $$4$ million for three years.

$2.$ If the interest rate is $18\%,$ what in the net present value of developing the drug? Round your answer to the nowest dollar.

Net present value, $r=$ if $$

Should Plizer invest in the developenest of the new drug?

$$

b$.$ If the inderest rate is $5\%,$ what is the net present value of developing the drug? Rousd your amoer to the nearest dollar.

Net present value, $r=5\%$ : $$

Should Pluer invest in the developenent of the new drug? $$