Model the payback period and 3-year return on a technical debt reduction investment — turn "we should really fix this" into a number a CFO can act on.
Debt reduction doesn't just save this year's cost — it prevents the compound growth an unmanaged debt load would otherwise carry (modeled here at the same 18%/yr rate used by the Cost Calculator). That gap widens every year you wait.
| Refactoring investment | Hiring 2 more engineers |
|---|
Hiring adds capacity without addressing the underlying drag — the debt keeps compounding under the larger team too. Refactoring investment is one-time and compounds in the other direction.
This is an illustrative financial model, not a formal business case. It uses a simplified discounted cash-flow approach with an 18%/yr unmanaged-debt growth assumption and a 10% discount rate for NPV — both illustrative, not derived from your specific financials.
Use this to sanity-check whether an investment is directionally worth pursuing, and pair it with the Business Case tool to build the version you'd actually present.
Illustrative scenarios at different team sizes, using typical debt-cost and investment ratios.
| Team size | Annual debt cost | Investment | Debt reduction | Payback |
|---|---|---|---|---|
| 10 engineers | $380,000 | $75,000 | 30% | ~14 months |
| 50 engineers | $1,900,000 | $300,000 | 35% | ~11 months |
| 200 engineers | $7,600,000 | $1,200,000 | 40% | ~9 months |