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Time Value Cutoff: A Primer


Dark_wizzie

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Why It's Useful

You must have heard of some noob complaining about whether to use "big bones" or "dragon bones" or maybe even "frost dragon bones" to train prayer. Or a person not knowing whether to high alch cheaply or go with the faster, yet more expensive method of stringing amulets. This guide aims to help you figure it all out.

 

What is Time Value Cutoff?

The idea is this. Suppose you decide to do a slower, yet cheaper method to train a skill. Each extra hour you spend there, training away, with your slower method versus the faster method, is one hour you could have spent directly trying to make money. And if you know how fast you make money in an hour on average, you can calculate which method is for you.

 

Application Example

Note: The prices of items fluctuate a lot on the Grand Exchange. Also, at any given day, an item may buy only at way below or above the GE trade price. Be wary and always use a calculator. Google has a good calculater. Just pop in queries like "500 x 500" and hit search.

 

Step One - List Your Goal and Assumptions

Goal: Get 5,000,000 prayer xp

Options: Big Bones, Dragon Bones, Frost Dragon Bones

Method: Gilded Altar

Bones per Hour: 1000

 

Big Bones = 328gp each, at 52.5xp each

Dragon Bones = 4,468gp each, at 252xp each

Frost Dragon Bones = 16,000gp each, at 620xp each.

 

What I will calculate: Which bone to use.

What I will NOT calculate: Whether to use gilded altar or ectofungus. That's another TVC problem. This example assumed you use gilded altar to train prayer.

 

Step Two - Find "Gp/Xp" and "Xp per Hour"

Big Bones: 328/52.5 = 6.25 gp/xp

Big Bones Xp per Hour = 52.5 x 1,000 = 52,500 xp per hour

Dragon Bones: 4,468/252 = 17.73 gp/xp

Dragon Bones Xp per Hour = 252 x 1,000 = 252,000 xp per hour

Frost Dragon Bones: 16,000/620 = 25.80 gp/xp

Frost Dragon Bones Xp per Hour: 620 x 1,000 = 620,000

 

Xp Needed: 5,000,000

 

Big Bone Method: 5,000,000/52.5 = 95,239 bones

95,239 bones/1,000 (Bones per Hour) = 95.23 Hours

Total Cost: 5,000,000 x 6.25 = 32,250,000gp

 

Dragon Bones Method: 5,000,000/252 = 19,842 bones

19,842/1,000 = 19.84 Hours

Total Cost: 5,000,000 x 17.73 = 88,650,000gp

 

Frost Dragon Bones Method: 5,000,000/620 = 8,065 bones

8,065/1,000 = 8.1 Hours

Total Cost: 5,000,000 x 25.80 = 129,000,000gp

 

Analysis

Big Bones vs Dragon Bones:

88,650,000gp - 32,250,000gp = 56,400,000 gp

95.25 - 19.84 = 75.41 Hours

56,400,000gp/75.41 Hours = 747,911/Hour

Thus the TVC compared to these two is: 747,911 gp/Hour

Dragon bones cost an extra 56.4m, but saves 75.41 hours.

If you make over 747,911 gp/Hour, you should use Dragon Bones rather than Big bones. But what about Dragon Bones vs Frost Dragon Bones?

 

Dragon Bones vs Frost Dragon Bones:

129,000,000gp - 88,650,000gp = 40,250,000gp

19.81 - 8.1 = 11.71 Hours

40,250,000gp/11.71 Hours = 3,437,233 gp/Hour

Thus the TVC compared to these two is: 3,437,233 gp/Hour

Frost Dragon Bones cost an extra 40.25m , but saves 11.71 Hours,

If you make over 3,427,233 gp/Hour, you should use Frost Dragon Bones rather than Dragon Bones.

 

Conclusion

TVC for Dragon Bones vs Big Bones is 747,911 gp per hour.

TVC for Dragon Bones vs Frost Dragon Bones is 3.43m per hour.

 

My Thoughts

I wrote this guide because I hope some people would appreciate turning Runescape into a more mathematical endeavor. However, you can always decide to play Runescape however you want to play it. After all, that is the CORRECT way to play it. TVC does NOT calculate how boring or clicking intensive something is. Whether the extra efficiency is worth it for the boringness involved is up to the reader to decide.

 

Other Applications

Now we consider that all things in Runescape can be expressed in TIME, the reader might notice that all xp earned on Runescape may be put into "time". For example, if the xp/hour for training runecrafting is at 40k per hour, we can say that each runecrafting xp is equal to Money You Can Make Per Hour/40,000. In this concept, you may find that Herblore really isn't that expensive anymore...

 

If you spot any mathematical errors in my guide, please let me know. If you wish to repost this, that's ok, just put my name in there somewhere. Other than that, let the comments roll.

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This will be a useful reference for people who ask questions in H&A and don't understand this concept as you have explained it very well. I think due to the experience of most of TIF's user and the fact that we had an explosion in efficiency and how to do it about 18 months ago most of these arguments are known to most people. But as I said this is well explained and is an important factor when calculating the efficiency of a particular training method.

Pedicabo ego vos et irrumabo
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Minigames: Level 5 in All Barbarian Assault Roles PM me in game or on these forums to play. Over 500 Castle Wars Games with 460+ Tickets.

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Nothing new, really. We use something called an efficiency rating though.

 

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Where GP1 is your maximum sustainable income, GP2 is the cost of the method, and XP is the xp of the method. This is of course in hours. The lower the value, the more efficient the method is.

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The idea of TVC is not really new, but I thought I'd post in case some people still don't know what it is. :)

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This is a really good explanation, especially for people in H&A who are just taking peoples recommendations at face value and not whether it's worth it to them, especially the part about how boring/click intensive the most effective methods often are.

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