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Perform a Net Present Value (NPV) Analysis for the project. The development cost profile is provided in HW3b.xlsx. The production costs are assumed to have
Perform a Net Present Value (NPV) Analysis for the project. The development cost profile is provided in HW3b.xlsx. The production costs are assumed to have a yearly fixed cost component of $20 million and an initial theoretical first unit cost (TFU) of $1.5 million per aircraft. Assume that 30 units are made per year, the yield is 0.8, and that good units are sold at $3 million a piece. Assume a learning curve of 0.9 and a discount rate of 8% and that the UAV is in production for 10 years after completing development.
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