Discussion
Statement I: Amortised development cost per aircraft falls as the production run lengthens.
Statement II: RDT&E is a one-off expense incurred before the first delivery.
In the light of the above statements, choose the correct answer.
Answer: C
Correct answer: Both Statement I and Statement II are correct
Both statements are correct and the second explains the first. RDT&E is a one-off expense incurred before the first aircraft is delivered - design, analysis, test articles, ground and flight test - and once spent it does not recur however many aircraft follow.
The charge each aircraft must carry is therefore the fixed sum divided by the quantity built, and it falls as the run lengthens. It is why manufacturers pursue derivatives and export sales so hard: every extra aircraft dilutes a cost already sunk.
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