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Question on OT suggested answer to Q1(b) June 2013 Exam

This topic has 1 reply, 2 voices, and was last updated 11 years ago by John Moffat.

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August 14, 2013 at 4:08 pm #138051
blackers23
Member
- Topics: 1
- Replies: 0
Hi there
In your suggested solution to Qu1(b) of the June 2013 F5 exam:
Why do you use a value of $10.08m for 6,000 members. Why not $9.9m? ($3.42m x 3 less costs of $360k)?
Many thanks for your help
August 15, 2013 at 7:24 am #138123
John Moffat
Keymaster
- Topics: 57
- Replies: 54711
It is because if you already know that there will be 6,000 members (because you have the perfect knowledge) you would prefer to not expand and get $10.08M rather than expand and only get $9.9M.
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