More realistically, there may be uncertainty on the cost to develop the product and the number of subscribers. Now assume the engineers report a range of $0.7-1.3 million to develop the product. Additionally, assume the monthly growth in number of subscribers could be anywhere
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- More realistically, there may be uncertainty on the cost to develop the product and the number of subscribers. Now assume the engineers report a range of $0.7-1.3 million to develop the product. Additionally, assume the monthly growth in number of subscribers could be anywhere from 200 to 2000 (though we are fairly certain there will be 2000 subscribers in the first month). Given these ranges, perform a sensitivity analysis on the ROI estimate after three years. Because you have two variables you are uncertain about, you should perform the calculation all combinations of the low-medium-high values for each variable. Report your ROI estimates in a 3×3 matrix like this:
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