CPV Asset Valuation Practice II

Practice session

An appraiser is valuing an internally developed enterprise management software using the Basic COCOMO Model (Constructive Cost Model / 构造性成本模型). The software codebase consists of 40 KLOC (40 thousand lines of delivered source code). In the organic mode COCOMO formula $\text{Effort (Person-Months)} = 2.4 \times (\text{KLOC})^{1.05}$, given $40^{1.05} \approx 48.09$, what is the estimated development effort in Person-Months (PM), and what is the total development cost if the average all-inclusive labor cost per person-month is RMB 25,000?

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