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Discussion in 'Agile and Scrum' started by Sandeep Souche(4802), Oct 12, 2019 at 2:06 AM.
This is the discussion thread for ASM group for the session.
Option-A: A Product Manager wants the team to work on a feature for a prospective customer. The one time cost of development is $100,000. The Sales team estimates that this customer will pay $40,000 as part of up-front license fees and an annual maintenance for five years that starts at $20,000 and grow at 5% per year.
Option-B: The team feels that it is better to work on resolving some technical issues in the product. The issues – if left unresolved might result in about 5 trouble tickets per month from existing customers causing a diversion of 10 hours to resolve each issue. The cost of each development hour is $50 and will rise by 5% per year. The one time cost of resolving the technical issues is $100,000.
Find out which option is better using: Payback Period, RoI, NPV (12% discount rate) and IRR.