Approximately 14 million americans are addicted to drugs and alcohol. the federal government estimates that these addicts cost the u. s. economy $300 billion in medical expenses and lost productivity. despite the enormous potential market, many biotech companies have shied away from funding research and development (r& d) initiatives to find a cure for drug and alcohol addiction. your firm - drug abuse sciences (das) - is a notable exception. it has spent $235 million to date working on a cure, but is now at a crossroads. it can either abandon its program or invest another $50 million today. unfortunately, the firm's opportunity cost of funds is 5 percent and it will take another five years before final approval from the federal drug administration is achieved and the product is actually sold. expected (year-end) profits from selling the drug are presented in the accompanying table. year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 $0 $0 $0 $0 $14,300,000 $16,500,000 $19,200,000 $21,900,000 $24,800,000 what is the net present value of the project?

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar.spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements.cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery.rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer.gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life.esquire company provides financial statements to external users every three years.