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An R&D evaluation method is described. Its development was conditioned by an earlier review of other methods and by certain local requirements. Although referencing a chemical-business system, the concept, and much of the procedure, can be applied to other R&D fields. Four separate and fairly simple computer programs are involved. The first three concern capital and operating cost (or income) estimates for a future commercial venture. The fourth program executes discounted cash flow (DCF) calculations over specific cash flow frameworks. Relationships between the commercial venture and the R&D required are briefly discussed; also, the importance of involving the marketing group in establishing, or verifying, relevant sales forecasts, etc. Overall, the method described offers a reasonably practical approach to the R&D evaluation problem. It is urged that evaluations of this kind be made at all stages of R&D progress.
Date of Publication: Feb. 1975