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Recently we have observed increased interest in frequency modulated continuous wave (FMCW) radars, mainly because of their low probability of intercept (LPI) properties. In such radars the information on range of targets appears in the frequency domain and it is obtained on the basis of spectrum analysis carried out for a so called beat signal. The beat signal is a product of mixing the received signal with the transmitted signal in the receiver of homodyne configuration. In the paper we briefly describe the principle of operation and design of the FMCW radar. Special attention is paid to digital processing of the beat signal. A prototype of an FMCW radar for naval application was made in the Telecommunications Research Institute. The prototype was tested among other things for optimisation of digital signal processing in a real sea environment. The noncoherent processing comprises FFT, CFAR thresholding, binary integration and scan-to-scan correlation. The paper deals with an experimental study on how different algorithms influence signal detection. The method consists of estimating the detection performance under various conditions. We examine the detection performance in relation to, for example, the kind of smoothing window in FFT, length of FFT, length of CFAR window, and rule of integration. The results obtained are presented.