"Well" says Linda "Its a risky project obviously. We'll need t invest about a $150,000, right up front, to get the lab ready and make the switch to working with a new virus. Also, because of the health risks involved, I recommend investing in additional insurance: probably another $50,000, just to be safe. And we'll need to suspend other profitable projects, which mean losing out on about $125,00.

If we were to be sued the payout $2,000,000.

Sensativity analysis: How high would the chance of a device failing have to be, in order for the insurance described above to be a good idea?(Assume a maximum coverage of $1,500,000