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Discussion in 'Agile and Scrum' started by Sandeep Souche(4802), Jul 13, 2019 at 2:07 AM.
Discussion group for ASM participants 13th Jul 2019 (starting date),
Try to answer this question in the context of benefits-cost analysis.
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 issues 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 and IRR.