Initial Investment Development Cost Technical Success Rate Commercial Success Rate Launching Cost Net Revenue of Commercial Success Net Revenue of Commercial Failure Required Rate of Return Option A Basic Model $2M (at Year 0) $1M in Year 1 0.8 0.65 $2.X M (at Year 2) $3.Y M (per year) From Year 2 to Year 5 $0.6M (per year) From Year 2 to Year 4 1X % Option B Advanced Model $4M (at Year 0) $1M in Year 1 0.7 0.8 $2.X M (at Year 2) $4.Y M (per year) From Year 2 to Year 5 $1.3M (per year) From Year 2 to Year 4 1X %