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Scenario 3 ECV PI, Understanding The Expected Commercial Value $25M Budget Your director is interested in understanding the expected commercial value method and how it

  • Scenario 3 ECV PI, Understanding The Expected Commercial Value

$25M Budget

Your director is interested in understanding the expected commercial value method and how it might impact investment decisions. He also wants to maximize the bang for buck so he has asked you to add the expected commercial value and ECV PI to your analysis. You are able to do this because your team has worked hard to understand the likelihood of commercial and technical success in each project. Prepare a report analyzing the ECV PI of each project, rank those projects, and provide a Go/Kill recommendation for each, maintaining your $25M total budget. Maximize the ECV of your portfolio using this method.

Scenario 3 (25M Total budget)
Scenario 3 Present Value Development Cost Commercialization Cost Probablity of Commercial Success Probability of Technical Success Value if Commericial Failure Value if Technical Failure Expected Value before Launch Expected Value before Commercialization Expected Value in Development Expected Commercial Value ECV PI Sum of Costs Ranking Decision
Zulu 30 3 2 56% 41% 0 0
Alpha 2 2 1 34% 79% 0 0
Tango 4 0.5 0.75 54% 56% 0 0
Beta 5 3 2 58% 34% 0 0
Sierra 42 4.5 8 58% 64% 0 0
Echo 10 7 5 45% 76% 0 0
Romeo 27 4 2 37% 71% 0 0
Oscar 8 1 0.5 43% 42% 0 0
Lima 69 10 5 31% 65% 0 0

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