Fig. 6. PDV for entire project except R&D (billions of dollars). Inclusion of R&D costs changes only the absolute magnitudes, and not the relative positions, of the curves. inclined upwards from the initial-capital axis. When the cost plane for a shuttle derived fleet is subtracted, the PDV contours of Fig. 5 close up (Fig. 6). This effect is simply a graphical representation of the fact that, past a certain point, additional vehicles increase fleet costs without substantially affecting the time or the costs of SMF development. The other costs that must precede space operations are associated with research and development. In order to analyze the effect of these expenses on the optimal production point, it is important to know just how they vary with Ko and M. Qualitatively, the degree of bootstrapping is related to the number of manufacturing processes employed in space. Although most tools and techniques can be used in a variety of processes (12), decreases in Ka are still expected to raise research costs. At the same time, however, bootstrapping reduces the need for developing optimal equipment at the outset by permitting changes in early project designs. In essence, starting with a small amount of capital enables some of the RND to be integrated with the space operations. The economic effect on PDV of this type of “learning by doing” is diminished by the brevity of the capital growth period in this example. Since the correlation between RND and Ko is difficult to assess, it will be assumed negligible. This assumption is reinforced by estimates which show that material processing represents a rather small proportion of the total research costs (12). Development costs should be even more insensitive to changes in M, since the transport capacity is enlarged by increasing the number, rather than the size, of the launch vehicles. To the extent that more advanced vehicles might be used at high
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