The Financial Feasibilty of Comsat Repair
Can we get enough money from grabbing dead communications satellites to pay for the
expenses? A typical older-generation commsat may have 24 transponders.
Transponders on a fully-functioning, up-to-date commsat rent for about two
million dollars per year per channel. That means that the revenue for
repairing a commsat comes to about 50 million dollars per year. A commsat
lifetime is nominally 15 years. Amortizing at 10% (a wild guess), fifteen
years of income equals exactly eight times the per-year income, so fifteen
years of $50 million per year gives us a net present value of $400 million
for a repaired commsat. This is close enough to the actual cost of a
commsat that it's comfortably in the right ballpark.
Now, the downside. We have to spend this money as
risk capital. Risk
capital costs a minimum of 50% more than non-risk capital. (Why
multiply the cost of money by a factor of 1.5, instead of dividing the net
present value? Because, once the mission is done, in year 1, the risk is
gone. The risk premium comes only in year one; after that the commsat is an
asset of known worth.) That means, roughly, if we could do the mission for
about $250 million costs, that it would about break even. But breaking even
would be great. We prove out the company, prove commercial manned
space flight works, space-test equipment, and attract attention. But can
we do it for $250 M?
If we can't, can we do two or three commsats in one mission for $250 M?
Possibly not, on this latter question. Geosynchronous orbit slots are hugely
valuable. It's quite possible that we could talk people into letting us fly to
one commsat, but possible that the intervening owners would not let us wander
Can we repair dead commsats, though? And, can we
guarantee to a bank that we can repair them, in space, the
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