tends to increase the unit costs 7-18 percent, with most increases in the 15-18 percent range. Only in the case of the two low-cost JPL examples is the increase significantly under 10 percent. In general, the larger increases are naturally associated with the greater capital costs. Lower plant factors also tend to magnify the incremental effect of using a higher discount rate since annual capital charges are fixed and must be spread over a smaller delivered output. A useful graphic illustration of the relationship between unit power costs and discount rate is shown in Ref. Al3. In this instance, various curves representing different unit charges are plotted against "rate of return." This analysis suggests that a price of 23-25 mills would be needed to recover the minimum capital cost at 10 percent. 5. Recovery of DDT&E Costs Although there are some significant potential economies of scale in capital costs, particularly in the projection of transportation costs, it seems generally reasonable, if not technically elegant, to compute capital costs for individual satellites. This is clearly not the case with DDT&E costs which, once incurred, are theoretically chargeable to all satellites in the production run. In the absence of any firm basis for projecting the length of such a production run, the impact of these costs on total cost per kilowatt-hour must be examined parametrically. This involves a complex iterative process involving the application of a discount rate to uneven production over various periods which differ from the period in which DDT&E costs will be incurred. While it might be possible to somewhat simplify the calculation by assuming a fixed percentage or unit charge to be allocated to DDT&E recovery, the use of such a technique would require guidelines from the responsible decisionmaking agencies. In the absence of such guidelines the parametric approach appears to be the best available. The dollar unit impact of DDT&E is a joint function of the price that can be obtained (or is required) in excess of the unit costs (excluding DDT&E) and the proposed production schedule which indicates the number of operational plants by year. (See equation (6) in Exhibit 22.)
RkJQdWJsaXNoZXIy MTU5NjU0Mg==