This report summarizes the results of the risk/return analysis of the proposed desktop replacement policy investment for The Environmental Protection Agency (EPA). The proposed investment was to accelerate the desktop replacement schedule from the status quo of once every five or more years to every three or four-years.

The method used to analyze this investment is the "Applied Information Economics" (AIE) approach developed by Doug Hubbard of Hubbard Decision Research (HDR).

A standard replacement cycle would enable us to stay current with the technology and not have the hardware (and corresponding OS) restrict the implementation of new technologies. Productivity is slightly improved with faster boot-up and processing times on desktops. A three year replacement cycle
would take advantage of the warranty included with the equipment. Beyond that time frame either extended warranties would need to be purchased, or staffing and parts would be needed to establish a PC repair capability.

 The expected Net Present Value (NPV) of the recommended policy changes was $12.8 million over 7 years.  Since this AIE analysis project cost was under $100,000 including EPA staff time, then the payback was at least 128:1.  This also excluded the potential benefits of the improved metrics and risk mitigation strategies resulting from the AIE analysis.  The cost of the AIE analysis was less than 1% of the investment analyzed, well within typical AIE cost guidelines.