Spacex Merlin 2 development.

I was reading the other day Elon Must said he'd like to develop a
large engine for a heavy lift rocket called the BFR.

What surprised me is he said it would cost $100m to develop.

I'm impressed that having spent ~$100m so far, he has purchased
buildings, hired 160+ staff, desgned, built, tested two engines (one
ablative, one regeneratively cooled), and had two smaller rocket
launchs. Bargain!

Seeing as the Merlin 2 is to be pretty much an upscaled model of an
existing design of his, with I presume a similar number of parts,
where do all the extra costs come from? Fuel is cheap. Similar number
of parts to design, build, put together.

There must be a big gap in my understanding.

Anyone?


Gunn