Question 1

Which of the following would not be considered an indirect operating cost for an IT initiative?

Accepted Answer

A) End user data entry. 
B) User self-training. 
C) User peer support. 
D) End user data management. 
A) End user data entry. 
B) User self-training. 
C) User peer support. 
D) End user data management.

Question 2

The benefits of an IT project are not necessarily measurable in financial terms.

Accepted Answer

A) True 
 B)False

Question 3

After identifying the relevant risks associated with an IT initiative,which of the following is not something that the project team should consider regarding each risk?

Accepted Answer

A) The financial impact of the risk scenario occurring. 
B) The probability of the risk scenario occurring. 
C) The potential benefits of the risk scenario occurring. 
D) The cost of mitigating the risk. 
A) The financial impact of the risk scenario occurring. 
B) The probability of the risk scenario occurring. 
C) The potential benefits of the risk scenario occurring. 
D) The cost of mitigating the risk.

Question 4

Which of the following is not a direct acquisition cost of an IT initiative?

Accepted Answer

A) Cost of hardware 
B) Cost of business disruption 
C) Cost of project management 
D) Cost of software development 
A) Cost of hardware 
B) Cost of business disruption 
C) Cost of project management 
D) Cost of software development

Question 5

The appropriate cost of capital to use in valuing an IT project is the same regardless of the project riskiness.

Accepted Answer

A) True 
 B)False

Question 6

Net present value techniques compute the unique rate of return for a particular IT project.

Accepted Answer

A) True 
 B)False

Question 7

When considering the sensitivity of estimates used to evaluate IT initiatives,which of the following are you likely to do?

Accepted Answer

A) Use multiple metrics to evaluate each IT initiative. 
B) Test the impact of changes in assumptions on the various financial metrics. 
C) Consider which groups in the organization will benefit. 
D) Develop exact quantifications of costs and benefits. 
A) Use multiple metrics to evaluate each IT initiative. 
B) Test the impact of changes in assumptions on the various financial metrics. 
C) Consider which groups in the organization will benefit. 
D) Develop exact quantifications of costs and benefits.

Question 8

Which of the following is not a question that businesses should answer before making major IT investments?

Accepted Answer

A) What key business issues does it address? 
B) What are the risks of doing the project? 
C) How will success be measured? 
D) None of the choices are correct. 
A) What key business issues does it address? 
B) What are the risks of doing the project? 
C) How will success be measured? 
D) None of the choices are correct.

Question 9

IDC estimates that what percent of IT spending is in the form of capital expenditures?

Accepted Answer

A) 25%. 
B) 40%. 
C) 70%. 
D) 95%. 
A) 25%. 
B) 40%. 
C) 70%. 
D) 95%.

Question 10

Which of the following risks considers the possibility that the new IT system will not be implemented on time or within budget?

Accepted Answer

A) Solution risk. 
B) Change risk. 
C) Alignment risk. 
D) Project risk. 
A) Solution risk. 
B) Change risk. 
C) Alignment risk. 
D) Project risk.

Question 11

Yellow Duck Brewery is considering two similar technology investments to help track production.Investment (1)has an NPV of $245,000 and a payback period of 3 years.Investment (2)has an NPV of $250,000 and a payback period of 4.25 years.Which investment would you advise them to choose? Why?

Accepted Answer

(open ended but they should ad

Question 12

Which of the following is not one of the potential approaches to quantifying the expected benefits of IT initiatives?

Accepted Answer

A) Real option theory. 
B) Simulation. 
C) External benchmarks. 
D) Expert opinion. 
E) Performance futures theory. 
A) Real option theory. 
B) Simulation. 
C) External benchmarks. 
D) Expert opinion. 
E) Performance futures theory.

Question 13

For a firm considering AIS and IT initiatives,accountants can play an important role in which of the following ways?

Accepted Answer

A) Testing business case controls. 
B) Memorializing the business case. 
C) Developing and reviewing the business case for the initiatives. 
D) Entering transactions into the new system. 
A) Testing business case controls. 
B) Memorializing the business case. 
C) Developing and reviewing the business case for the initiatives. 
D) Entering transactions into the new system.

Question 14

Which of the following is not a direct operating cost of an IT initiative?

Accepted Answer

A) End-user data management 
B) Ongoing hardware replacement 
C) Software upgrades 
D) Hardware disposal 
A) End-user data management 
B) Ongoing hardware replacement 
C) Software upgrades 
D) Hardware disposal

Question 15

Benefits of IT initiatives should be measured in comparison to which of the following?

Accepted Answer

A) The amount of information available. 
B) Current inputs of the existing IT processes. 
C) Revenues and costs that will occur without implementing the initiative. 
D) Non-financial aspects of the project. 
A) The amount of information available. 
B) Current inputs of the existing IT processes. 
C) Revenues and costs that will occur without implementing the initiative. 
D) Non-financial aspects of the project.

Question 16

Which of the following would not help mitigate change risk?

Accepted Answer

A) Conduct training. 
B) Incent employees to learn new system. 
C) Reduce employee costs. 
D) Communicate changes to employees. 
A) Conduct training. 
B) Incent employees to learn new system. 
C) Reduce employee costs. 
D) Communicate changes to employees.

Question 17

Cooper Automotive is considering expanding,but to do so,they need to invest in new systems expected to cost $1,000,000.They estimate the salvage value to be $0 at the end of 10 years,so depreciation will be $100,000 per year.They estimate that profits will increase by $250,000 per year.Coop's cost of capital is 10%.Required:
Compute the payback period,the accounting rate of return,the net present value,and the internal rate of return.Advise Coop on whether he should invest.Would your advice change if the increase in profits is only $175,000 per year?

Accepted Answer

At $250,000 annual incremental profit:
P

Question 18

Which of the following is the least effective approach to quantifying expected benefits of an IT project?

Accepted Answer

A) Find out what other firms experienced in similar situations 
B) Review options with the hardware vendor 
C) Consult with experts 
D) Use simulation software 
A) Find out what other firms experienced in similar situations 
B) Review options with the hardware vendor 
C) Consult with experts 
D) Use simulation software

Question 19

Which of the following is not a major consideration when assessing business requirements for IT initiatives?

Accepted Answer

A) Complementary business process changes 
B) Potential technological solutions 
C) Gaps in performance indicated by the strategy map 
D) Project risks 
A) Complementary business process changes 
B) Potential technological solutions 
C) Gaps in performance indicated by the strategy map 
D) Project risks

Question 20

The economic justification process for a new IT initiative includes all of the following except:

Accepted Answer

A) Allocate funds for the recommended option. 
B) Evaluate potential costs,benefits,and risks for each option. 
C) Identify potential solutions. 
D) Develop value propositions for each option. 
E) Assess the business requirements. 
A) Allocate funds for the recommended option. 
B) Evaluate potential costs,benefits,and risks for each option. 
C) Identify potential solutions. 
D) Develop value propositions for each option. 
E) Assess the business requirements.

Which of the following would not be considered an indirect operating cost for an IT initiative?

The benefits of an IT project are not necessarily measurable in financial terms.

After identifying the relevant risks associated with an IT initiative,which of the following is not something that the project team should consider regarding each risk?

Which of the following is not a direct acquisition cost of an IT initiative?

The appropriate cost of capital to use in valuing an IT project is the same regardless of the project riskiness.

Net present value techniques compute the unique rate of return for a particular IT project.

When considering the sensitivity of estimates used to evaluate IT initiatives,which of the following are you likely to do?

Which of the following is not a question that businesses should answer before making major IT investments?

IDC estimates that what percent of IT spending is in the form of capital expenditures?

Which of the following risks considers the possibility that the new IT system will not be implemented on time or within budget?

Yellow Duck Brewery is considering two similar technology investments to help track production.Investment (1)has an NPV of $245,000 and a payback period of 3 years.Investment (2)has an NPV of $250,000 and a payback period of 4.25 years.Which investment would you advise them to choose? Why?

Which of the following is not one of the potential approaches to quantifying the expected benefits of IT initiatives?

For a firm considering AIS and IT initiatives,accountants can play an important role in which of the following ways?

Which of the following is not a direct operating cost of an IT initiative?

Benefits of IT initiatives should be measured in comparison to which of the following?

Which of the following would not help mitigate change risk?

Which of the following is the least effective approach to quantifying expected benefits of an IT project?

Which of the following is not a major consideration when assessing business requirements for IT initiatives?

The economic justification process for a new IT initiative includes all of the following except:

Accounting Information Systems and Firm Value

Accountants As Business Analysts

Data Modeling

Relational Databases and Enterprise Systems

Sales and Collections Business Process

Purchases and Payments Business Process

Conversion Business Process

Reporting Processes and Extensible Business Reporting Language Xbrl

Data Analytics in Accounting: Concepts and the Amps Model

Data Analytics in Accounting: Tools and Practice

Emerging Technologies: Blockchain and Ai Automation

Accounting Information Systems and Internal Controls

Information Security and Computer Fraud

Monitoring and Auditing Ais

The Balanced Scorecard, Business Model Canvas, and Business Value of Information Technology

Filters

Exam 17: Evaluating Ais Investments

Which of the following would not be considered an indirect operating cost for an IT initiative?

The benefits of an IT project are not necessarily measurable in financial terms.

After identifying the relevant risks associated with an IT initiative,which of the following is not something that the project team should consider regarding each risk?

Which of the following is not a direct acquisition cost of an IT initiative?

The appropriate cost of capital to use in valuing an IT project is the same regardless of the project riskiness.

Net present value techniques compute the unique rate of return for a particular IT project.

When considering the sensitivity of estimates used to evaluate IT initiatives,which of the following are you likely to do?

Which of the following is not a question that businesses should answer before making major IT investments?

IDC estimates that what percent of IT spending is in the form of capital expenditures?

Which of the following risks considers the possibility that the new IT system will not be implemented on time or within budget?

Yellow Duck Brewery is considering two similar technology investments to help track production.Investment (1)has an NPV of $245,000 and a payback period of 3 years.Investment (2)has an NPV of $250,000 and a payback period of 4.25 years.Which investment would you advise them to choose? Why?

Which of the following is not one of the potential approaches to quantifying the expected benefits of IT initiatives?

For a firm considering AIS and IT initiatives,accountants can play an important role in which of the following ways?

Which of the following is not a direct operating cost of an IT initiative?

Benefits of IT initiatives should be measured in comparison to which of the following?

Which of the following would not help mitigate change risk?

Which of the following is the least effective approach to quantifying expected benefits of an IT project?

Which of the following is not a major consideration when assessing business requirements for IT initiatives?

The economic justification process for a new IT initiative includes all of the following except:

Accounting Information Systems and Firm Value

Accountants As Business Analysts

Data Modeling

Relational Databases and Enterprise Systems

Sales and Collections Business Process

Purchases and Payments Business Process

Conversion Business Process

Reporting Processes and Extensible Business Reporting Language Xbrl

Data Analytics in Accounting: Concepts and the Amps Model

Data Analytics in Accounting: Tools and Practice

Emerging Technologies: Blockchain and Ai Automation

Accounting Information Systems and Internal Controls

Information Security and Computer Fraud

Monitoring and Auditing Ais

The Balanced Scorecard, Business Model Canvas, and Business Value of Information Technology

Filters