Apparently your friend who says "it only takes time and effort" has never seen the proof that time=money. Since effort=time, it's clear that time=effort=money.
In my field (computer science), grant support for a middling-size research project might last five years and provide support for two PI's, a postdoc, and two to four graduate students. Let's look at an example personnel budget. Note- you can find lots of NSF or NIH sample budgets online that illuminate this further.
Assume both PI's ask for two months of summer support per year. If their base salary is $90,000 for a nine-month contract, then their base monthly salary is $10,000. Thus, if they both ask for two months, then that's $40,000 per year in base salary for the PI's.
Then you add on PI fringe benefits costs. This money provides benefits like health care. Different universities have different fringe rates. But, let's say that our rate is 15%. Then we have an additional $40,000*.15 = $6,000 per year.
Postdocs are similar, but they're paid full time to do research. They might have a base salary of $55,000 per year. Then their fringe benefits are $8250
Now let's talk grad students. Let's say we have three graduate students. Each graduate student has a monthly stipend of $2,500- or $30,000 each / $90,000 combined per year. Then you charge fringe on those students, which is going to be slightly less, say 10%. Thus, the fringe for all three per year is $9,000.
These are all the "direct salary costs". To recap, we have:
Salary + Fringe:
PI 1: $20,000 + $3,000
PI 2: $20,000 + $3,000
Postdoc: $55,000 + $8,250
Grad 1: $30,000 + $3,000
Grad 2: $30,000 + $3,000
Grad 3: $30,000 + $3,000
Total: $185,000 + $23,250 = $208,250 per year
But, these are only the direct costs. All grants also include what are called "indirect costs", which are paid to the university and go towards things like building maintenance, utilities, and non-research-staff salaries. A pretty normal indirect cost rate is 50%. So then we also have:
Indirect Costs = 0.5 * Direct Costs
$104,125 = 0.5 * $208,250
Finally, our total yearly cost:
Total Cost = Direct Costs + Indirect Costs
$312,375 = $208,250 + $104,125
Just like when you go to the grocery and just throw stuff in the basket, it adds up a lot quicker than you think. Notice that all of this is just to support six people per year (two PhD PI's, one PhD postdoc, and three grad students). And this is just counting salaries, it doesn't include other costs like equipment, publication fees, or travel.
The salary-only cost for a three year project under the above would be $937,125. The salary-only cost for a five year project would be $1,561,875. Note that the actual costs would be slightly higher in real life because of things like pay raises and cost of living adjustments.
If you consider published papers to be the basic unit of academic research, then suppose that this project turns out 8 papers per year (which is reasonable but optimistic). The cost per published paper is then a little over $39,000 per paper.