You're right, I forgot R&D as a cost. I suppose I could fudge and call it part of manufacturing cost to make my post look good, but that's not right, because, as someone pointed out, it's tax-deductible to one degree or another.

That doesn't mean, though, that you get your R&D costs back by the tax decuctibility. You will only get back the percentage of it that corresponds to your top tax bracket percentage.

The same things can be said of the cost of physical manufacture.

In the meantime, of course, the whole R&D cost had to be financed much earlier, so there's interest on top of it.

Dave Oesterreich