help 2
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MajorProject2submissionrecommendedchecklist.docxWhen working on Major Project 2 please choose an approach you are most comfortable with.
Excel template (in a separate file) is intended to help you. If it confuses you instead, please disregard it completely or modify it the way you see necessary.
The following checklist is intended to help you verify that your work covers all major calculations and points necessary for successful completion of the project
Project 2 submission checklist
Fosbuvir Project |
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Expected revenues are calculated with properly taking into account probabilities of approval and obsolescence |
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SGA is calculated with properly taking into account probabilities of approval and obsolescence |
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OCF is calculated. Attention is given to properly treating Taxes in loss-making years are incorrect – the company overall is profitable and can use tax credit to reduce its overall tax liabilities.-making years |
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FCF is calculated taking into account CapEx |
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NPV and IRR are properly calculated (attention to NPV formula use – check Excel mistakes screencast). |
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Calculations made for the case of FDA approval in two-stage investment with probability of FDA approval, CapEx and Depreciation properly adjusted |
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Calculations made for the case of FDA rejection in two-stage investment with probability of FDA approval, CapEx and Depreciation properly adjusted |
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Expected NPV is calculated as a weighted of NPVs for different outcomes (approval/rejection) weighted by probabilities of FDA approval/rejection |
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Crystal Ball (Optional, extra 5% bonus) |
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Assumptions cells are set at least for variables described in the project (probabilities of FDA approval and obsolescence each year). Additional assumptions can be made |
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Simulation is run for NPV and IRR as forecast cells |
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Probability of positive NPV is found based on NPV distribution chart |
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Acquisition of Pharmaset |
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Expected revenues are calculated with properly taking into account new probabilities of approval and obsolescence. Ditto for SGA |
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Proper SGA is chosen and expected SGA is calculated taking into account probabilities of approval and obsolescence. |
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OCF and FCF are calculated. |
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Value if acquired is calculated, taking account TVM and opportunity cost of foregone Fosbuvir project |
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Financing |
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NOPAT and Terminal Value are calculated if Pharmaset gets FDA approval |
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Pharmaset’s book value is calculated for this and the next year, if FDA rejects the drug |
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For each financing case cash flows by Fosbeck to investors are set up separately for the case of FDA approval and rejection |
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Expected FCFs are calculated based as a weighted of NPVs for different outcomes (approval/rejection) weighted by probabilities of FDA approval/rejection |
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NPVs are calculated |
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Report |
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Report starts from executive summary with your main conclusions and recommendations put there! |
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Main part: · Very briefly describes work performed · Presents results · Analyzes results, focusing on risk analysis (different scenarios, sensitivities, breakeven etc.). · If simulation was performed, results are analyzed and discussed · Conclusions are drawn |
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All sources used are properly cited and put in a reference list at the end. Remember that your instructor will submit your report to Turnitin. If you have your own access to Turnitin, I recommend submitting the report yourself and notify the instructor |
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Formatting, spelling and grammar are checked. Proof reading helps to catch typos missed by software. |
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