Reconsider the research-and-development decision in Figure 3.32. If you decide to con tinue the project, you will have to come up with the $2 million this year (Year 1). Then there will be a year of waiting (Year 2) before you know if the patent is granted. If you decide to license the technology, you would receive the $25 million distributed as $5 mil lion per year beginning in Year 3. On the other hand, if you decide to sell the product di rectly, you will have to invest $5 million in each of Years 3 and 4 (to make up the total in vestment of $10 million). Your net proceeds from selling the product, then, would be evenly distributed over Years 5 through 9.

Assuming an interest rate of 15%, calculate the NPV at the end of each branch of the decision tree.