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Q17-MMC from BPP Revision Kit

DDilnoza5y ago
Dear Sir, I am a bit confused regarding not including $14m (7m from Y0 and 7m from Y1) in "Pe" when calculating "delay option". Why only 35m of investment included? Thanks
John MoffatJohn MoffatTutor5y ago#1
That $14M is being paid whatever happens, for the development. The option is as to whether or not to delay the decision to produce and market the game for 2 years.
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