The calculations are based on the following assumptions:

• Development cost for Build My Own: $800,000
• Development time for Build My Own: 18 months
• Development cost for Buy Digi Module: $10,000
• Development time for Buy Digi Module: 6 months
• Constant development costs over the time to implement
• Constant sales volume throughout the relevant time periods

Both the cost analysis and the profit analysis are affected by the shorter time to market for the products that implement the Buy Digi Module solution.

The cost analysis is based on a higher volume of products for the Buy Digi Module solution because sales would start before the Build My Own solution. The calculation is primarily designed for budgetary reasons and does not describe the average cost per unit. The actual average cost per unit, at 60 months, is provided in a bar graph.

The profit analysis describes the time it would take to recover the development costs to implement the Build My Own solution and the lost income during the longer development time. The profit analysis excludes the opportunity cost of otherwise investing the initial development cost--the real break-even time may be longer.

Data points on the cost and profit graphs may be verified by hovering over them and performing manual calculations.

Conclusions:
Based on the inputs and assumptions, the total cost of the Buy Digi Module solution would be lower for 6.1 years, during which time 55,833 units would be sold compared to 45,833 units sold for the Build My Own solution.

It would take 173 months (14.4 years) for the Build My Own solution to return the same profit as the Buy Digi Module solution.