
Value Engineering of Requirements 199
NPV = 100,000/1.03
2
– 60,000 = 34,259
Since NPV is positive, yes, the feature should be included in the requirements.
Equation 10.7 is useful when the benefit of the feature is realizable after some
discrete period of time. But what happens if there is some incremental benefit of
adding a feature; for example, after the first year, the benefit of the feature doubles
(in future dollars). In this case we need to use a variation of Equation 10.7 that
incorporates the notion of continuing cash flows.
For a sequence of cash flows, CF
n
, where n = 0,…,k represents the number of
years from initial investment, the net ...