Exam 15: Financial-Analysis-Tools

Tangible costs are costs whose dollar value cannot be calculated easily.

Operational costs are incurred only once at the time a system is developed or acquired.

The period between the beginning of systems operation and the point when operational costs are rapidly increasing is called the ____ of the system.

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

List the steps involved in payback analysis.

Direct costs are costs that can be associated with the development of a specific system.

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

Discuss the two ways to calculate present value using a spreadsheet program such as Microsoft Excel.

Which is an example of variable costs?

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.

Explain how return on investment (ROI)may be used for ranking projects.

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

In present value analysis,most companies require a rate of return that is higher than the discount rate because of the degree of risk in any project compared with investing in a bond.

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.

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

Developmental costs are incurred after a system is implemented and continue while the system is in use.

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

_____ means that the projected benefits of a proposed system outweigh the estimated costs.

What term is used for the charging of indirect IT department costs based on the resources used by an information system?

Explain the no charge method.