Question
You are trying two decide between two UI designed. User interface design A cost $80,000. User interface design B cost $275,000 (extensive usability testing is
You are trying two decide between two UI designed. User interface design A cost $80,000. User interface design B cost $275,000 (extensive usability testing is planned). User interface B is expected to save each user 10 minutes a day. Each users time is worth $20 hour. There are 60 users. The system is expected to be in production for 5 years. Which UI is the better value? (Assume a 6% interest rate and 48 work-weeks in a year.) Assume you want to calculate the present value of both options. Option A is already in present value, so no work is needed. Which of the following formulas can be used to convert the cost of option B into preset value (note, cost equals money spent - money saved).
Name Symbol Cash Flow Diagram Single-Payment Compound-Amount F=P(F/P, i, n) + 1 + 2 + 3 + n-1 n Single-Payment Present-Worth P=F(P/F, i, n) 1 1 2 3 n -1 n Equal-Payment-Series Sinking-Fund A= F(A/F, i, n) 0 1 2 3 n -1 Equal-Payment-Series Capital-Recovery A= P(AP, i, n) 1 2 3 n-1 n OLI I Equal-Payment-Series Present-Worth P=A(P/A, i, n) 1 2 3 n-1 n Name Symbol Cash Flow Diagram Single-Payment Compound-Amount F=P(F/P, i, n) + 1 + 2 + 3 + n-1 n Single-Payment Present-Worth P=F(P/F, i, n) 1 1 2 3 n -1 n Equal-Payment-Series Sinking-Fund A= F(A/F, i, n) 0 1 2 3 n -1 Equal-Payment-Series Capital-Recovery A= P(AP, i, n) 1 2 3 n-1 n OLI I Equal-Payment-Series Present-Worth P=A(P/A, i, n) 1 2 3 n-1 nStep by Step Solution
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