what is the probablity rating Phase 3 If the phase 2 test results were positive, phase 3 testing of Briodal would be initiated. The phase 3 testing would take 3 years to complete. The cost of phase 3 testing would be much higher as many more patient trials are needed. Thus, $100 million would be spent on research and development during each of the three years. At the completion of the testing (end of the three years), there would be a 30% likelihood that the test results would be positive and a 70% likelihood that the test results would be negative. If the test results were positive, Briodal would enter the FDA review portion of the FDA drug approval process, whereas if the test results were negative, all testing (and spending) on Briodal would cease. The corporate tax rate would be 25% of pre-tax income. If a loss occurs for the year, the loss would reduce the company's pre-tax income that year, and thereby reduce the company's tax expense. FDA Review and Approval If the phase 3 test results were positive, Briodal would enter the FDA Review portion of the drug approval process. The FDA Review would take 1 year