This afternoon, I was thinking about a more optimum scale for the space launch business. In a future post, I will go more into that, but in the meantime I put together a simple Net Present Value (NPV) calculator for a rocket development investment decision. This is based very roughly on the SpaceX Falcon I, which I discussed in a previous post.
I put the development costs as $24 million over 3 years. The factors used are 6 launches a year, a $4,200 price per pound to Low Earth Orbit (LEO), 45% gross margins, 10% spending on SG&A, and a 25% discount rate. Using these factors, the business is just barely on the positive side -- a really tough business! Of course, SpaceX likely uses different figures (such as different total development costs, gross margin percentage, or discount rate), but it's interesting to try to see the parameters under which they are working.
Here's the spreadsheet.
As always, this is released under the Creative Commons: Share And Share-Alike License. All edits or corrections are welcomed.