The takeaway from Fitts' Law is that small objects are more difficult to click on the more you have to move your mouse. Since you cannot (usually) predict where a user's pointer/mouse is you have to assume a smaller target is more difficult to select.
More formally Fitts' Law, applied to HCI, shows that the time required for a person to move the pointer to a target area is based upon the distance to the target and the size of the target. The screen edge, as it turns out, is a large target because the cursor is stopped when it reaches it. Therefore one can place a small tool bar at the edge and have it seem larger. I think this is the way many people apply Fitts' Law.
It must be remembered that Fitt's studies were not based on Human Computer Interaction but production line tasks. Hence we must factor in the fact that we move a mouse - and not the cursor. The user may have to pick the mouse up and place it back down again.
Hick's Law refers to the decision making process. Too many unrelated, unorganized choices bad. Fewer, or better organized choices, good. Or, to put it more formally, the cognitive load is increased as choices increase. This increases the time necessary to make a decision and can lead the user to opt out of the process as the burden in making a choice is greater than the reward of completing the task.
I have never seen anyone in the UX community applying mathematical formulas for where to place a navigation bar. We will be at that point when we are in a VR world and designs take into consideration a far greater range of human motion.
Now to begin to answer your question. You're correct that you would have to add the two equations together. The time necessary to make a decision is separate from the time and effort necessary to bring your cursor to your target. Keep in mind that the location of the menu (screen edge or center of the screen) is important.
