Exam 15: Toolkit C: Financial Analysis Tools

Unlike payback analysis, present value analysis considers only the earlier values and not all the costs and benefits.

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

Payback analysis, in spreadsheets, requires a formula to display cumulative totals, year by year.

_________ is the charging of indirect IT department costs based on the resources used by an information system.

Identify an example of fixed costs.

The _________ of a future dollar is the amount of money that, when invested today at a specified interest rate, grows to exactly one dollar at a certain point in the future.

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

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

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

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

Direct costs usually are more difficult to identify and predict than indirect costs.

When IT department costs are not charged to other departments, the information systems department is called a(n) _________ because it generates accounting charges with no offsetting credits for IT services.

In a fixed charge method, the IT group is regarded as a(n) _________, which is a department that is expected to break even or show a profit.

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

When determining economic feasibility, a systems analyst must consider a project's benefits compared to the project's _________, which includes ongoing support and maintenance costs as well as acquisition costs.

Some managers are critical of payback analysis because it places all the emphasis on early costs and benefits and ignores the benefits received after the payback period.

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

Identify an example of developmental costs.

_________ is the total time that a user is connected actively to a remote server - some Internet service providers use this as a basis for charges.

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