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The VP of Clinical Research of your company is concerned about datin quality in a key ongoing clinical trial. If the clinical trial is delayed

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The VP of Clinical Research of your company is concerned about datin quality in a key ongoing clinical trial. If the clinical trial is delayed due to data quatity resulting in a delay of regulatory approval then the company is at risk for losing significant sales. The VP of Clinical Research has asked you to perform an RO1-based risk assessment. You worked with the Executive Direetor of Commercial Sales and the Project Manager of the clinical trial to perform the risk assessment and your summary of the risk assessment is the following. The Project Manager believes there is a 40% chance that there will be a data quality issue resulting in a delay in regulatory approval leading to lost sales. If this tipping point oceurs the 105090 range of impact of lost sales to the company as measured in net present value is 5413.57MM, 806.85MM, and 1,149.45MM respectively. The clinical research organization (CRO) leading the elinieal trial is requesting an additional S5MM to mitigate this risk. The Project Manager and the Executive Director of Commercial Sales discussed the CRO proposal and concluded that the CRO risk mitigation plan would reduce the chance of a data quality issue resulting n a delay in regulatory approval leading to lost sales from a 40% chance to a 5% hance. The S5MM expense would occur this year. Aceounting for the cost of the RO risk mitigation expense, the 10-50-90 range of impact to the company as aeasured in net present value is 53.00MM,67.23MM, and 131.47MM. If the risk oes not occur and the CRO risk mitigation was pursued, the net present value of at scenario is $3.0MM. The company's risk-free discount rate is 6%. a. What is the expected NPV impact (expected risk liability) before implementing the CRO risk mitigation plan? What is the expected NPV impact (expected risk liability) after implementing the CRO risk mitigation plan

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