Lockheed Martin Example 2 (Payback Analysis)

Lockheed Martin Example 2 (Payback Analysis) - satellite...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Lockheed Martin Example 2 (Payback Analysis) Lockheed Martin has secured a satellite launch contract from a European communications company that will pay them $3.9M per year for the next 8 years. To land that contract, they invested $13M in a satellite tracking system. Of that amount, $8M was paid up front and the remaining $5M was paid during the first year of operation. The annual operating costs for the
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: satellite tracking system are estimated at $0.9M per year (which includes the cost of personnel, electricity, maintenance, etc.). At the end of the contract, it is estimated that the equipment will have a salvage value of $0.5M. How long will it take Lockheed-Martin to break even on their initial investment?...
View Full Document

This note was uploaded on 12/07/2011 for the course CIVL 4111 taught by Professor Moore,l during the Fall '08 term at U. Memphis.

Ask a homework question - tutors are online