Tidy First?

Chapter 25. A Dollar Today > A Dollar Tomorrow

More is more and less is less, right? Depends. With money, it depends on:

• When

• How sure

If I give you a dollar today, you can spend it on something you want or you can invest it in a way that gives you more money later. If I promise you a dollar tomorrow, it’s worth less than the dollar I give you today. Why?

• You can’t spend it, so it’s worth less.

• You can’t invest it, so when you get it, it will be worth less than the dollar you got today.

• There’s some chance that I won’t actually give it to you. Well, not me. I’m entirely trustworthy. But someone else, yeah, you have to be prepared that they won’t give you the dollar, making that “dollar tomorrow” worth less.

How much less? This is a complicated question. For now, the important fact is that all dollars are not valued equally. If we want to, for example, add them up, then we need a date attached to each one.

How do we value a software system? Say you have a software system and I want to buy it. How much should I reasonably pay you?

What it is is irrelevant. It’s a payment system. It consists of umpteen services. It has 1.4 million lines of code. Its average function cyclomatic complexity is 14 (just kidding, the average of power law–distributed values is useless). But none of this matters to me as a purchaser.

As a purchaser, I want to know how the money is going to flow. “Gazinttas and gazouttas,” as my Pappy would have said. To value the software, I can model it as ...