Risk-Adjusted NPV forecast model with Basic and Advanced inputs – one indication, one geography
This Risk-Adjusted Net Present Value (RA NPV) forecast calculator is a useful metric to compare several programs in terms of their risk and value. For example, an early-stage (i.e., riskier) product with higher revenue potential may be as attractive as a late-stage (i.e., less risky) product with lower revenue potential.
Notably, the RA NPV calculator is an expanded version of our Non-risk adjusted (NRA) NPV calculator
. Specifically, RA NPV incorporates probabilities of success (PoS) for each development phase
Overall, RA NPV calculations include Revenue, Costs, Cash Flow, and Risk parameters. For description of Revenue inputs, please check our Revenue Calculator
. For description of Costs and Cash Flow inputs, please check our NRA NPV calculator
. Here, Risk is expressed using PoS for each phase of development as described below in more detail.
Lastly, to find out which input makes the biggest difference in NPV, go to the NPV Sensitivity Analysis