Re: Amortise
The R&D costs are wholly irrelevant, assuming a $5m launcher can be built. R&D is always a NRE, assuming the product goes to market. If the product doesn't go to market the costs are spread across the organization in whatever manner Management deems best.
Obviously, the funds for R&D have to come from somewhere, but as far as your bookkeeping goes those funds go down the same chute as utility bills and facilities maintenance. That kind of money is broken out from the figures that deal with actual financial performance. Which is why investors hate R&D so much.
The money is gone and will never again be seen on the side of the line where money is made. From a bookkeeping perspective, R&D breaks the laws of physics and results in the absolute, and complete, annihilation of matter. The way R&D is accounted for is one of the few things in corporate accounting that actually benefits the customer. If R&D was calculated as a component of product cost the display you're staring at right now would have cost you approximately $2b :)
Biting the hand that feeds IT
