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Q17-MMC from BPP Revision Kit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Q17-MMC from BPP Revision Kit

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  • August 19, 2021 at 10:28 am #632081
    dilnoza90
    Member
    • Topics: 8
    • Replies: 7
    • ☆

    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

    August 19, 2021 at 3:14 pm #632155
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    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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