Question

You pay your servers $3,300 per month. A design consultant says she can redesign your space to make the servers 20% more efficient. She will design it and build the new space for just $25,000. How long will it take you to recover her cost if she is correct in her productivity prediction?

Answer 1

If the servers are 20% more efficient the amount of dollar sales they should be doing more each month are a total of $660 ($3,300x20%). If they do $660 more per month divide that amount by the redesign amount of $25,000 and you will get the number of months it takes to recover the cost. If you are wanting to recover the cost based on a 20% increase it will take 38 months to fully recover the cost.