Gamekeepers Inc. was a company that developed and marketed software games. It was growing very fast and investing furiously in software development.

Details for the past three years are given below:

Gamekeepers Inc. capitalized software development after technical feasibility was achieved and amortized this over a period not exceeding $24$ months.

Gamekeepers came under analyst attack for being overly aggressive regarding its capitalization. Analysts argued that Gamekeepers was expensing much

lower than the industry norm of $80\%($of amount incurred$)$ and that this amount was dropping over the years.

What would Gamekeepers operating profit have been had it expensed the industry norm of $80\%$ every year?

a$.-$$$34,-$$$58,-$$$76$

b$.-$$$32,-$$$72,-$$$120$

C$.-$$$24,-$$$9,$$$11$

d$.-$$$32,-$ $$55,-$ $$86$

e$.-$ $$24,-$ $$19,-$ $$111$Gamekeepers Inc. was a company that developed and marketed software games. It was growing very fast and investing furiously in software development. Details for the past three years are given below:

$ Millions

Year $-3$

Year $-2$

Year $-1$

Year $0$

Income Statement

Revenues

$66$

$159$

$248$

Cost of Goods Sold

$(11)$

$(22)$

$(28)$

Software Development Cost

$(48)$

$(81)$

$(119)$

Selling & General Admin

$(31)$

$(65)$

$(90)$

Operating Profit

$(24)$

$(9)$

$11$

Balance Sheet

Capitalized Software Development Cost

$22$

$44$

$143$

$337$

Gamekeepers Inc. capitalized software development after technical feasibility was achieved and amortized this over a period not exceeding $24$ months. Gamekeepers came under analyst attack for being overly aggressive regarding its capitalization. Analysts argued that Gamekeepers was expensing much lower than the industry norm of $80\%($of amount incurred$)$ and that this amount was dropping over the years.

What would Gamekeepers operating profit have been had it expensed the industry norm of $80\%$ every year?

a$.$

$-$ $ $34,-$ $ $58,-$ $ $76$

b$.$

$-$ $ $32,-$ $ $72,-$ $ $120$

c$.$

$-$ $ $24,-$ $ $9,$ $ $11$

d$.$

$-$ $ $32,-$ $ $55,-$ $ $86$

e$.$

$-$ $ $24,-$ $ $19,-$ $ $111$