What is the average cost per missile

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Reference no: EM131202028

Merowak Missiles is proposing to develop its next generation Democratizer Offensive Weapon System II (DOWS II) for the US military. It expects to have to sink $1 billion into R&D and design, spend $0.5 billion building the tools and production facility that are unique to DOWS II production. It houses these in standard factory floor space that costs $1 million. Each missile has a marginal cost of $2,000. The Pentagon is considering ordering 1 million of these missiles. What is the average cost per missile that Merowak could bid for the contract?

Reference no: EM131202028

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