Q3) Develop an ROI model for Precise/SQL product?

1) DBA Saving
Assuming they work for 30 hours per week (6 hrs/day* 5 days)
Assuming leaves so taking no. of weeks in a year to be 48
No. of hours saved/DBA/Year = 9.4*48 = 451.2 hours
Salary of DBA = $60,000/48 weeks/ 30 hours per week = 41.67/ hour
Annual saving per DBA per year = 451.2*41.67 = $18,801/DBA
Annual saving per firm = $18,801*10 = $1,88,015
2) Hardware saving
Assuming annual interest rate of 8%
Cost of capital saving = $1,430,000*0.08*(0.6*3)/12 = $17,160
Saving due to price drop = $1,430,000*0.3*0.6*3/12 = $64,350
Total hardware saving per firm = $17,160+$64,350 = $81,510
3) User saving
No. of daily transaction per user = 194,000/215 = 903 transaction/user
Daily end-user response time per user = 903*15 = 13545 sec/user = 3.76 hours/user/day
Improvement in end user response time = 0.25*3.76 = 0.94 hours
% of response time saved per user = (0.94/8)*100 = 11.75% of time
Saving per user = 30000*0.1175*1.33 = 4688/user/year
Total user saving = 4688*215 =$1,007,920/year

Total saving = (1)+(2)+(3)

= $1,88,015 + $81,510 + $1,007,920 = $1,277,445/year
Average price that firm is charging = (15000 + 25000)/2 = $20,000
ROI = $1,277,445/$20,000 = 63.87x