Originally posted by: Kenazo
There will also be new Type 45 Destroyers to replace the Type 42 Class. They will come into service in 2007. The combined value of the initial contracts placed for the aircraft carriers and Type 45 Destroyers is around $165 million.
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Don't B-2's cost more than that? For the price of one b-2 Canada could by a navy.
The B-2's cost is not as much as the press leads you to believe.
When they say a B-2 costs "$2 billion", the plane itself does not cost nearly $2 Billion. What they are doing is playing with numbers. They are dividing the program cost by the number of aircraft produced.
For instance, let's say you spend $50 billion on research and development for a new aircraft. Much of that $50 billion is spent before the first aircraft rolls off the assembly line. That R&D expense will be amortized over the length of the program. Say the original order is for 1,000 aircraft and each aircraft costs $100 million to produce for parts and labor. To figure the unit cost, you divide the cost of development by the number of aircraft produced, and add that to the cost of making the jet. So $50 billion divided by 1,000 units is $50 million R&D cost per unit. So your $100 million jet now is considered a "$150 million aircraft". That wouldn't seem too bad.
But let's say that they decided to trim the order in half, to 500 planes. Your $100 million airframe cost stays the same, but the $50 billion R&D cost is only divided among 500 aircraft. That's now a $100 million R&D expense added to the cost of each aircraft instead of $50 million. So your unit cost balloons up to $200 million per jet.
Now let's say the politicians start throwing that number around a bit and further scare the purchasers. So let's say that now they only want 250 jets instead of the original 1,000. Now the R&D cost will be $200 million per jet. That makes the unit cost $300 million for each aircraft.
So now they're not sure that they want this aircraft, whose unit price is now twice what it was supposed to be. So they purchase a minimal amount of aircraft, say 50 of them. Now the R&D cost per unit is $1 billion per jet. So when the news picks up on it, they quote it as being a "$1.1 billion aircraft". But in reality the aircraft doesn't cost that much, it's still $100 million. The money spent on R&D will never be recovered, even if they ended up not building any planes at all.
As it applies to the B-2, originally the order was for 132 aircraft, but with the demise of the Soviet Union the program was cut to 20 bombers plus 1 test aircraft, which was later converted to operational status. The program cost about $20 billion for the purchase of the 21 aircraft, and about $25 billion for the R&D cost. That comes out to about $950 million for the aircraft itself, and about $1.2 billion for development, which makes the media claim the B-2 costs "over $2 billion a plane".