Exam 15: Evaluating Ais Investments

Organizations have developed techniques for evaluating IT projects for several reasons. Which of the following is not one of those reasons? A. Selecting one investment often means forgoing other potentially value-increasing investments. B. IT projects often require new sets of skills, which may not be readily available, or may be cost-prohibitive to build. C. IT projects often require large amounts of capital, and for most firms, capital resources are limited. D. IT projects often involve changes in business processes that will affect substantial portions of the organization.

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Question 1

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IT projects often require new sets of skills, which may be readily available, or may be cost-prohibitive to build.

Which of the following is not a reason that large IT projects require economic justification? A. IT is a commodity, every firm makes IT investments B. IT investments require large amounts of capital C. Capital resources are limited D. Major IT projects can affect substantial portions of the organization

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Question 2

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IT is a commodity, every firm makes IT investments

For a firm considering AIS and IT initiatives, accountants can play an important role in which of the following ways? A. Auditing the financial statement reports created by the new system. B. Implementing the controls in the new technology. C. Developing and reviewing the business case for the initiatives. D. Entering transactions into the new system.

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Question 3

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Developing and reviewing the business case for the initiatives.

Time that employees devote to self-training on new technology is an example of direct operating costs.

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Question 4

Which of the following is not one of the potential approaches to quantifying the expected benefits of IT initiatives? A. Real option theory. B. Simulation. C. External benchmarks. D. Expert opinion. E. Performance futures theory.

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Question 5

Capital budgeting techniques provide precise estimates on an IT projects costs and benefits.

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Question 6

In addition to technology, which of the following is required in order that a firm may achieve desired business process improvements for its IT invesment? A. Other enabling (complementary) changes. B. Software configuration. C. The Balanced Scorecard and associated strategy map. D. Business Intelligence.

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Question 7

Which of the following is not a direct operating cost of an IT initiative? A. End-user data management B. Ongoing hardware replacement C. Software upgrades D. Hardware disposal

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Question 8

Which of the following is an example of project risk? A. The technology will not work as expected. B. The IT project is not aligned with the company's strategy. C. The financial benefits may not be delivered. D. The IT project may exceed budget.

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Question 9

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

(True/False)

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Question 10

The value proposition step in the analysis of an IT initiative should focus on five questions, including the timing of expected benefits.

(True/False)

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Question 11

Which of the following risks considers the possibility that the new IT system will not be implemented on time or within budget? A. Solution risk. B. Change risk. C. Alignment risk. D. Project risk.

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Question 12

Which of the following would not be considered an indirect operating cost for an IT initiative? A. End user data entry. B. User self-training. C. User peer support. D. End user data management.

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Question 13

Which of the following is not a potential benefit of an IT investment? A. Revenue enhancement B. Revenue savings C. Cost avoidance D. Revenue protection

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Question 14

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

(True/False)

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Question 15

Which of the following is the formula for payback period? A. Increased cash flow per period / initial investment. B. Initial investment / increased cash flow per period. C. CF_t / (1 + r)^t D. (Average annual income from IT initiative) / (Total IT initiative investment cost).

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Question 16

Which of the following is a key advantage of the Net Present Value metric for evaluating an IT initiative? A. It relates estimates using accrual accounting. B. It is easy to calculate. C. It considers the time value of money. D. It is sensitive to the discount rate applied.

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Question 17

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? 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 occuring. D. The cost of mitigating the risk.

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Question 18

In making the business case for an IT investment, companies should assess the sensitivity of results to the assumptions.

(True/False)

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Question 19

Acquisition costs for an IT initiative include all of the following except: A. Software licenses. B. Training. C. Maintenance fees. D. Project management.

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Question 20

Showing 1 - 20 of 28

Time that employees devote to self-training on new technology is an example of direct operating costs.

Which of the following is not one of the potential approaches to quantifying the expected benefits of IT initiatives? A. Real option theory. B. Simulation. C. External benchmarks. D. Expert opinion. E. Performance futures theory.

Capital budgeting techniques provide precise estimates on an IT projects costs and benefits.

Which of the following is not a direct operating cost of an IT initiative? A. End-user data management B. Ongoing hardware replacement C. Software upgrades D. Hardware disposal

Which of the following is an example of project risk? A. The technology will not work as expected. B. The IT project is not aligned with the company's strategy. C. The financial benefits may not be delivered. D. The IT project may exceed budget.

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

The value proposition step in the analysis of an IT initiative should focus on five questions, including the timing of expected benefits.

Which of the following risks considers the possibility that the new IT system will not be implemented on time or within budget? A. Solution risk. B. Change risk. C. Alignment risk. D. Project risk.

Which of the following would not be considered an indirect operating cost for an IT initiative? A. End user data entry. B. User self-training. C. User peer support. D. End user data management.

Which of the following is not a potential benefit of an IT investment? A. Revenue enhancement B. Revenue savings C. Cost avoidance D. Revenue protection

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

Which of the following is the formula for payback period? A. Increased cash flow per period / initial investment. B. Initial investment / increased cash flow per period. C. CF_t / (1 + r)^t D. (Average annual income from IT initiative) / (Total IT initiative investment cost).

Which of the following is a key advantage of the Net Present Value metric for evaluating an IT initiative? A. It relates estimates using accrual accounting. B. It is easy to calculate. C. It considers the time value of money. D. It is sensitive to the discount rate applied.

In making the business case for an IT investment, companies should assess the sensitivity of results to the assumptions.

Acquisition costs for an IT initiative include all of the following except: A. Software licenses. B. Training. C. Maintenance fees. D. Project management.

Accountants As Business Analysts

Data Modeling

Relational Databases and Enterprise System

Sales and Collections Business Process

Purchases and Payments Business Process

Conversion Processes

Data Analytics in Accounting

Reporting Processes and Extensible Business Reporting Language XBRL

Ais and Internal Controls

Information Security and Computer Fraud

Monitoring and Auditing Ais

The Balanced Scorecard and Business Value of Information Technology

The Systems Development Life Cycle and Project Management: Addressing the Challenges of Building Ais Systems

Filters

Exam 15: Evaluating Ais Investments

Time that employees devote to self-training on new technology is an example of direct operating costs.

Which of the following is not one of the potential approaches to quantifying the expected benefits of IT initiatives? A. Real option theory. B. Simulation. C. External benchmarks. D. Expert opinion. E. Performance futures theory.

Capital budgeting techniques provide precise estimates on an IT projects costs and benefits.

Which of the following is not a direct operating cost of an IT initiative? A. End-user data management B. Ongoing hardware replacement C. Software upgrades D. Hardware disposal

Which of the following is an example of project risk? A. The technology will not work as expected. B. The IT project is not aligned with the company's strategy. C. The financial benefits may not be delivered. D. The IT project may exceed budget.

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

The value proposition step in the analysis of an IT initiative should focus on five questions, including the timing of expected benefits.

Which of the following risks considers the possibility that the new IT system will not be implemented on time or within budget? A. Solution risk. B. Change risk. C. Alignment risk. D. Project risk.

Which of the following would not be considered an indirect operating cost for an IT initiative? A. End user data entry. B. User self-training. C. User peer support. D. End user data management.

Which of the following is not a potential benefit of an IT investment? A. Revenue enhancement B. Revenue savings C. Cost avoidance D. Revenue protection

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

Which of the following is the formula for payback period? A. Increased cash flow per period / initial investment. B. Initial investment / increased cash flow per period. C. CFt / (1 + r)t D. (Average annual income from IT initiative) / (Total IT initiative investment cost).

Which of the following is a key advantage of the Net Present Value metric for evaluating an IT initiative? A. It relates estimates using accrual accounting. B. It is easy to calculate. C. It considers the time value of money. D. It is sensitive to the discount rate applied.

In making the business case for an IT investment, companies should assess the sensitivity of results to the assumptions.

Acquisition costs for an IT initiative include all of the following except: A. Software licenses. B. Training. C. Maintenance fees. D. Project management.

Accountants As Business Analysts

Data Modeling

Relational Databases and Enterprise System

Sales and Collections Business Process

Purchases and Payments Business Process

Conversion Processes

Data Analytics in Accounting

Reporting Processes and Extensible Business Reporting Language XBRL

Ais and Internal Controls

Information Security and Computer Fraud

Monitoring and Auditing Ais

The Balanced Scorecard and Business Value of Information Technology

The Systems Development Life Cycle and Project Management: Addressing the Challenges of Building Ais Systems

Filters

Which of the following is the formula for payback period? A. Increased cash flow per period / initial investment. B. Initial investment / increased cash flow per period. C. CF_t / (1 + r)^t D. (Average annual income from IT initiative) / (Total IT initiative investment cost).