Exam 15: Financial Analysis Tools

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.

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

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

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

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