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# Calculation of new costs (last part of case)

MBB Final Round Case - Smart Education
Neue Antwort am 5. Juli 2020
1 Antwort
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Hi,

Thanks for this great case.

I have a question regarding the new costs to be calculated with the IT investment.

The equation is New cost = Investment*Percentage to be paid by client – Savings in months 0-6 – Savings in months 6-12.

However, in months 0-6 the price of rent is 62K (same as without the IT investment), and it only goes down to 52K in month 6-12. Therefore we should only save 6x10K and not 6x10K + 6x20K ?

Thanks!

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Hi Morgane,

thanks for solving my case.

It is a bit difficult to identify it in the graph due to the colors, however the rental cost in District B without IT investment is 72K before the investment. The 62K instead refers to Other costs.

In case you have any other questions or comments please feel free to contact me.

Best,

Francesco

(editiert)

War diese Antwort hilfreich?

Hi Francesco, The question says the graph is showing "the decrease in retail cost". Wondering why the saving is 10k and 20k rather than 52k and 62k directly read from the graph? Thanks Jing

Hi Jing, the graph indeed shows the decrease in rent cost, but the axes are about the rent per month. Consequently, 62k in 0-6 refers to the rent per month in that period (that is, 10k in decrease given the original value was 72k). Hope that clarifies, if not please let me know. Best, Francesco

Francesco gab die beste Antwort
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