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Exam 15: Financial-Analysis-Tools

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Question 21

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Identify an example of fixed costs.

A) Consumable supplies costs
B) Printer paper costs
C) Hardware rental charges
D) Telephone charges

E) B) and D)
F) B) and C)

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Question 22

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Which is an example of indirect costs?

A) Project team members' salaries
B) Hardware purchases used only for new systems
C) Consumable supplies costs
D) Insurance expenses

E) B) and C)
F) A) and D)

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Question 23

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A(n) _____ method is a technique that uses accounting entries to allocate the indirect costs of running an IT department.

Fixed costs are costs that are relatively constant and do not depend on a level of activity or effort.

Critics of return on investment analysis raised a point that the return on investment (ROI)technique does not recognize the timing of costs and benefits.

Explain the no charge method.

Cost-avoidance benefits refer to expenses that are necessary if a new system is not installed.

Variable costs are costs that vary depending on the level of activity.

Positive benefits increase revenues,improve services,or otherwise contribute to an organization as a direct result of a new information system.

Intangible costs are costs that can be assigned a specific dollar value.

Critics of return on investment analysis raised a point that return on investment (ROI)measures the overall rate of return for a total period and annual return rates vary considerably.

_____ is performed to determine the economic feasibility of an information system project and to compare alternative solutions.

In a client/server system,_____ time is the time that the server actually responds to client requests for processing.

Which is an example of operational costs?

In a fixed charge method,the IT group is regarded as a _____ center,which is a department that is expected to break even or show a profit.

Return on investment (ROI) is calculated using the formula _____.

The cost of customer dissatisfaction,lower employee morale,and reduced information availability are examples of _____.

Return on investment analysis considers costs and benefits over a shorter time span than payback analysis.

Payback analysis that is recorded and calculated in spreadsheets requires a formula to display cumulative totals,year by year.

Which process involves determining how long it takes an information system to pay for itself?