Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

HELP! Question 8 Your answer is partially correct. Try again. Calisto Launch Services is an independent space corporation and has been contracted to develop and

HELP!

image text in transcribed

Question 8 Your answer is partially correct. Try again. Calisto Launch Services is an independent space corporation and has been contracted to develop and launch one of two different satellites. Initial equipment will cost $750,000 for the first satellite and $850,000 for the second. Development will take 5 years, at an expected cost of $150,000 per year for the first satellite, $120,000 per year for the second. The same launch vehicle can be used for either satellite and will cost $275,000 at the time of the launch 5 years from now. At the conclusion of the launch, the contracting company will pay Calisto $2,500,000 for either satellite. Calisto is also considering launching both satellites. Because Calisto would have to upgrade its facilities to handle two concurrent projects, the initial costs would rise by $150,000 in addition to the first costs of each satellite. Calisto would need to hire additional engineers and workers, raising the yearly costs to a total of $400,000. An extra compartment would be added to the launch vehicle at an additional cost of $75,000. As an incentive to do both, the contracting company will pay for both launches plus a bonus of $1,000,000. Show the comparisons and external rates of return used to reach this decision: 12.9% Comparison 1: First satellite only versus second satellite only v ERR 1: 10.9 Comparison 2: Second satellite only versus both satellites ERR 2: % Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is +0.2. Question 8 Your answer is partially correct. Try again. Calisto Launch Services is an independent space corporation and has been contracted to develop and launch one of two different satellites. Initial equipment will cost $750,000 for the first satellite and $850,000 for the second. Development will take 5 years, at an expected cost of $150,000 per year for the first satellite, $120,000 per year for the second. The same launch vehicle can be used for either satellite and will cost $275,000 at the time of the launch 5 years from now. At the conclusion of the launch, the contracting company will pay Calisto $2,500,000 for either satellite. Calisto is also considering launching both satellites. Because Calisto would have to upgrade its facilities to handle two concurrent projects, the initial costs would rise by $150,000 in addition to the first costs of each satellite. Calisto would need to hire additional engineers and workers, raising the yearly costs to a total of $400,000. An extra compartment would be added to the launch vehicle at an additional cost of $75,000. As an incentive to do both, the contracting company will pay for both launches plus a bonus of $1,000,000. Show the comparisons and external rates of return used to reach this decision: 12.9% Comparison 1: First satellite only versus second satellite only v ERR 1: 10.9 Comparison 2: Second satellite only versus both satellites ERR 2: % Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is +0.2

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions