SLIDE 6

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NOTES - slide #6

6,1,1 refers to the current strategy for continuously engaging in 6 high risk, 1 medium risk, 1 low risk research project.

0,7,1 refers to the alternative 'A' strategy for instead continuously engaging in no high risk research, 7 medium risk and 1 low risk research project.

The current level of research investment of about $700,000 per project, per year, will be maintained for each project in both strategies.

Definition of Risk in this context:

RISK = THE CONTINUOUS RISK AFTER EACH PROJECT SUCCESS OF FAILING TO PERFORM ANY BETTER THAN THE PROJECTION

There is a 33% risk with the current strategy of loss of profit in 17 years time.

There is a 1 in 10 chance with the current strategy that the next successful new technology will not arise for another 40 years, assuming the company could survive the prolonged losses up to that time.

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Other presentations: Example 2 | Example 3

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