A note from Sary

Amortization is the process of spreading the cost of a resource investment over the estimated useful life of that investment. For example, a book designer may choose to purchase a copy of Adobe InDesign, the software often used by professionals to typeset books. Compared to most software packages, In Design is pricey: a single-user license costs $700. Is it worth it? The answer depends on how many books the designer uses the software to typeset. If they never complete a project, they've wasted their money. If they use it to typeset ten books for $1,000 each, they've earned $10,000 by making a $700 investment--not bad at all. Amortized across ten projects, the cost of the software is only $70 a project, or 7 percent of the revenue each project brings in. The designer's credit card may hurt when the purchase is made, but the tool offers the ability to earn more money than would be possible otherwise.

Sary The Personal MBA, page 195 · November 2, 2023 Save to shelf
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