MECH 431

Conference 7

Updated 2018-07-16

Conference 7


Pharma R&D Discussion

How do we analyze rate of return on R&D, something that is uncertain?

Should the government be involved in R&D?


Q: Will midterm 2 be similar to midterm 1?

The exam is still take-home. But the style of the question would be different (less plug-and-chug).

Q. Asking engineers or experts and cite as source?


Q. How much marketing data should one assume/make up?

Use existing or analogous data if possible. Try and find data for a similar product that would be more easily obtainable. Keep made-up numbers to a minimum.

Q. Future modules in report?

Missing - please fill

Q. Grading for draft?

Not harsh, the intent is to provide feedback

Q. How to handle taxes if the company annual report only reports the revenue for North America as a whole

Generally (preview), when looking at any given period, you can get a net benefit from benefit-cost.

Q. Suggested problems for recent modules?


Q. Good way to determine period of analysis?

Ask instructor

Q. What should the interest rate be in NPV or EACF analysis

From lesson of weighted costs of capital: it should be from the sources of capital etc.

Q. How to cover depreciation if the company will be leasing the equipment rather purchasing?

Leasing costs are expense. Generally, there won’t be depreciating of the equipment. Depreciating is part of the grading rubric, but incorporate it as much as possible. (Perhaps when comparing purchasing vs. leasing, include depreciating in the purchasing portion).

Q. For opportunity cost, is a detailed analysis required for other options?

Not necessary. i.e. if I buy a house, then the opportunity cost would not able to invest into something else (insert more detail here - I lagged out).

Q. France winning the World Cup?