Marketing
The following are estimates using the NPV calculator:
Expected Commercial Value (NPV)
$11,099,275
Probability of Commercial Success
Probability of Technical Success
Discount Rate
Cashflows
FY13
FY
Development Costs
$2,000,000
$1,000,000
Launch and Marketing Costs
$1,200,000
Forecasted Units Sold
$5,200
Forecasted Revenue (Unit Sales Price x Units Sold )
$2,080,000
Discounted Cashflows (10-Year)
Calculated
NPV Income
$22,200,816
NPV Development Costs
$3,720,341
NPV Launch and Marketing Costs
$2,941,037
FY15
FY16
FY17
FY18
FY19
$400,000
$200,000
$200,000
$200,000
$100,000
$800,000
$300,000
$300,000
$300,000
$150,000
$9,000
$11,000
$10,000
$8,600
$7,400
$3,600,000
$4,400,000
$4,000,000
$3,440,000
$2,960,000
FY20
FY21
FY22
FY23
$100,000
$50,000
$150,000
$100,000
$100,000
$100,000
$6,600
$5,800
$5,200
$4,800
$2,640,000
$2,320,000
$2,080,000
$1,920,000
1b.
The probability commercial success was an assumed input, a constant. It was 0.8. This figure went into the Expected Commercial Value calculation, which was the NPV multiplied by the probability of technical success and the probability of commercial success....
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