Hi,

Can someone please explain the context below in more detail? Thank you very much!

JB Hi Fi will allocate 10% of its existing G&A costs to the new division, starting in year 2. These costs now total $20 million for the entire firm and are expected to grow 5% a year in the long term. Specific to this project, it is expected that JB Hi Fi will have an increase of $1.5 million in general and administrative costs in year 2 when the new division starts generating revenues, and that this amount will grow with the new division's revenues after that.