to the OP:
I have to question your motivation for taking on a project of this type. Do you want to have a fun car to drive or are you specifically looking for an AWD platform that slays Mustang GTs??
Bottomline, if you are like me and aren't as mechanically inclined as some of the people that post here with insane engine builds that consist of so many swapped parts and deleted pieces that the only thing thats original equipment is the doors and glass on the car then this will cost you quite a bit.
Your friend's car will beat you in a dragrace unless you invest approx. 8k in the ordeal (motor, ecu, tranny, turbo, all manner of bolt-ons, suspension, tuning, and labor). Not including the original cost of the vehicle that you'll be buying as the platform or any kind of aesthetics. It would be a bad ass ride though.
If you were going for broke... Perrin modded a WRX with a 3.0 H6 with twin turbos. That'll spank anything the Mustang can bring to the table. That'll be brutal, neck snapping torque and the HP that puts you in the back of your seat esp. when the boost kicks in.
I'm a realist though without a bottomless wallet. Like everyone else said, mod the car a bit , and let your friend beat you in the dragrace... and you beat him in everything else. OR always drag race in the wet... let the AWD sort it out, his RWD Mustang will be slipping and sliding all over.