a. Present the data in tabular format as shown in lecture. b. Present the data in a Spider plot format. c. Which input has the biggest impact on the PW?

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QUESTION 3:
Bonnet Pharmaceuticals needs to raise
$10,000,000 in order to build a new R & D unit
for a new pharmaceutical drug they intend to
launch in 2016.
The following table lists 4 critical input variables
for the financial analysis and the
associated limits of uncertainty:
Input Lower Limit Base Case Upper Limit
Building Cost 80% $6,000,000 125%
Equipment Cost 90% $4,000,000 110%
Annual Revenue 90% $7,000,000 110%
Annual 0&M Costs 85%
QUESTION 3:
Bonnet Pharmaceuticals needs to raise $10,000,000 in order to build a new R & D unit
for a new pharmaceutical drug they intend to launch in 2016.
The following table lists 4 critical input variables for the financial analysis and the
associated limits of uncertainty:
Input
Lower Limit
Base Case
Upper Limit
Building Cost
Equipment Cost
80%
$6,000,000
125%
90%
$4,000,000
110%
Annual Revenue
90%
$7,000,000
110%
Annual O&M Costs
85%
$3,000,000
115%
With a MARR of 10% and a project life of approximately 5 years, conduct a sensitivity
analysis using PW as the figure of merit assessed.
a. Present the data in tabular format as shown in lecture.
b. Present the data in a Spider plot format.
c. Which input has the biggest impact on the PW?
$3,000,000 115%
With a MARR of 10% and a project life of
approximately 5 years, conduct a sensitivity
analysis using PW as the figure of merit
assessed.
a. Present the data in tabular format as shown in
lecture.
b. Present the data in a Spider plot format.
c. Which input has the biggest impact on the
PW?
Transcribed Image Text:QUESTION 3: Bonnet Pharmaceuticals needs to raise $10,000,000 in order to build a new R & D unit for a new pharmaceutical drug they intend to launch in 2016. The following table lists 4 critical input variables for the financial analysis and the associated limits of uncertainty: Input Lower Limit Base Case Upper Limit Building Cost 80% $6,000,000 125% Equipment Cost 90% $4,000,000 110% Annual Revenue 90% $7,000,000 110% Annual 0&M Costs 85% QUESTION 3: Bonnet Pharmaceuticals needs to raise $10,000,000 in order to build a new R & D unit for a new pharmaceutical drug they intend to launch in 2016. The following table lists 4 critical input variables for the financial analysis and the associated limits of uncertainty: Input Lower Limit Base Case Upper Limit Building Cost Equipment Cost 80% $6,000,000 125% 90% $4,000,000 110% Annual Revenue 90% $7,000,000 110% Annual O&M Costs 85% $3,000,000 115% With a MARR of 10% and a project life of approximately 5 years, conduct a sensitivity analysis using PW as the figure of merit assessed. a. Present the data in tabular format as shown in lecture. b. Present the data in a Spider plot format. c. Which input has the biggest impact on the PW? $3,000,000 115% With a MARR of 10% and a project life of approximately 5 years, conduct a sensitivity analysis using PW as the figure of merit assessed. a. Present the data in tabular format as shown in lecture. b. Present the data in a Spider plot format. c. Which input has the biggest impact on the PW?
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