D-code

Starship technologies is the brainchild of a few key ex-NASA employees. Starship provides satellite launch capabilities for low weight payloads to the communications and pharmaceutical industries. The principals wish to know whether their venture can be profitable. They wish to retire in four years, and prepare some preliminary data for analysis: Initial target for launches is set at four per year, increasing by two each year. The initial selling price is set at $10,000 per payload pound, but will be reduced by 2% each year as volume increases. The payload size for the Stargate IV rocket is 500 lbs. Variable costs include: Engineering and Administration at $2000 per payload pound Fuel at $5000 per payload pound Annual Fixed costs include: Office and Launch Pad Rental Expenses: $700,000 Salaries: $500,000 Utilities: $100,000 Assuming a 46% tax rate for Starship, what is the profitability outlook for the next four years. What happens to net profit if fuel cost is increased 20%?