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  • Cashflow Lifetime Options Nucleon

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    Ritik Maheshwari
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    This document presents cash flow projections for 5 options to commercialize a nucleon technology over 15 years from 1991-2002. Option 1 involves building a plant and commercializing the technology. Option 2 adds obtaining a license. Option 3 involves contracting out production and commercialization. Option 4 adds obtaining a license. Option 5 involves solely obtaining a license and earning royalties through product sales. The document calculates the net present value for each option both with and without patent approval, and provides assumptions around discount rates, manufacturing expenses, and perpetual growth rates.

    Original Description:

    Case workings

    Original Title

    Nucleon Case Solution- Working (1)

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    This document presents cash flow projections for 5 options to commercialize a nucleon technology over 15 years from 1991-2002. Option 1 involves building a plant and commercializing the technology. Option 2 adds obtaining a license. Option 3 involves contracting out production and commercialization. Option 4 adds obtaining a license. Option 5 involves solely obtaining a license and earning royalties through product sales. The document calculates the net present value for each option both with and without patent approval, and provides assumptions around discount rates, manufacturing expenses, and perpetual growth rates.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    414 views2 pages

    Cashflow Lifetime Options Nucleon

    Uploaded by

    Ritik Maheshwari
    This document presents cash flow projections for 5 options to commercialize a nucleon technology over 15 years from 1991-2002. Option 1 involves building a plant and commercializing the technology. Option 2 adds obtaining a license. Option 3 involves contracting out production and commercialization. Option 4 adds obtaining a license. Option 5 involves solely obtaining a license and earning royalties through product sales. The document calculates the net present value for each option both with and without patent approval, and provides assumptions around discount rates, manufacturing expenses, and perpetual growth rates.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 2

    NUCLEON

    Cashflows- Over Lifetime


    Option 1 2 3 4 5
    Plant + Plant + Contract + Contract + License +
    Year Sales
    Commerical License Commerical License License
    1,991 -3,350 -3,350 -250 -250 3,000
    1,992 -1,840 -1,840 -1,995 -1,995
    1,993 -23,204 -23,204 -2,550 -2,550
    1,994 -4,013 - -4,013
    1,995 -4,013 - -4,013
    1,996 -4,013 - -4,013
    1,997 5,000 7,000 5,000 7,000
    1,998 21,480 5,370 21,480 5,370 2,685 53,700
    1,999 39,800 9,950 39,800 9,950 4,975 99,500
    2,000 50,000 12,500 50,000 12,500 6,250 125,000
    2,001 52,000 13,000 52,000 13,000 6,500 130,000
    2002 Total 333,913 83,478 333,913 83,478 41,739 150,000
    2,002 60,000 15,000 60,000 15,000 7,500 150,000
    Terminal
    Value 273,913 68,478 273,913 68,478 34,239
    NPV 14,743 -5,503 26,919 16,879 25,684

    If patent is not approved


    NPV -18,380 -14,805 -6,205 -2,629 3,000

    Assumptions -18.7% -13.5% -5,042.33 -2,274.63


    Growth in perpetuity is 5% 5,042.33 2,274.63
    Cashflows occur at end of period - -

    Mfg Expenses are calculated based on variable overhead expenses provided in Exhibit 1
    Comment
    Discounting Rate 28.0%
    Mfg Expenses 4013
    Growth 5%

    Patent approval year (Jan 1998)

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