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

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August 14, 2013 at 4:08 pm #138051
blackers23
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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
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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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