Well, i personally think that developers shouldnt set the targets. Its for the manager to do it, be it Agile or Non-Agile
I agree, with Ilja Preuss, that for Iteration 1 the estimates should be the same. In Agile model, its iterative dev, and estimation is more complex. . in non-agile model, there are standards available to size the new requirements added / changes to exisitng functionality. One example is Function point technique, which could be used to esimate dev and application value addition services
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Thanks