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Q25 MMC PAGE 160 cash flows are given in question as 1,2,3 ,4years but the solution is solved as in inflows begin from third year onwards .We didnt allocate these cash flows to 1,2,3 years as given in question,Is it because of this assumption that there will be no inflow in the period when cash is spent ,last expenditure falls on 2 year which means cash flows will begin from 3rd year onwards hence taken so????
The costs of developing the game will occur whatever they do. It is only what happens from the third year where the option exists to delay the decision.
Sorry I didn’t get you ,I am asking about cash inflow depiction shown in answer .Its starts from third year not like in question which fell on year 1,2,3 etc . ? why is it so?Hope my query is clear
The cash flows are for the four year period of the game. The do not start selling the game until it has been developed, which takes two year. So the first flow is in 3 years time.
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