Essentials of Systems Analysis and Design (6th Edition)
6th Edition
ISBN: 9780133546231
Author: Joseph Valacich, Joey George
Publisher: PEARSON
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Chapter 4, Problem 17PE
Program Plan Intro
Economic feasibility analysis of an
Monetary benefits of an information system = $85,000 per year.
One-time costs = $75,000
Recurring cost = $35,000 per year.
Discount rate = 12%
Time period = 5 years
Explanation of Solution
Overall Return on Investment (ROI):
Overall return on investment can be calculated as:
Explanation of Solution
Break-Even Analysis (BEA):
- Break even analysis is carried out by determining NPV of yearly cash flows.
- The yearly cash flows are calculated by subtracting present values of recurring costs from the present value of yearly benefits.
- The overall NPV cash flow is total cash flow of the preceding years.
- After determining NPV yearly cash flows, it is found that break even occurs between year one and two.
- This is because year two is the very first year where overall NPV is positive...
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Students have asked these similar questions
Suggest the suitable models for the following mentioned scenarios
1. Process Visibility is necessary
2. For Small and medium size interactive systems
3. To explore unknown requirements
4. To accommodate change at any time
5. Need to reduce the risk of overall project failure
6. Need of Risk Assessment
22.
How is WINWIN Spiral Model different from Spiral Model?
a.
It defines tasks required to define resources, timelines, and other project related information.
b.
It defines a set of negotiation activities at the beginning of each pass around the spiral.
c.
It defines tasks required to assess both technical and management risks.
d.
It defines tasks required to construct, test, install, and provide user support.
Q- a) What is PERT and CPM in project management show the difference between them b) Consider the following engineering project. 1-What is the critical path 2- Compute the ES, EC, LS, LC and the slack time, and display all the values in a table. Activity Immediate Time (week) predecessor Activity A A A, B D B E A, C, D 8 3- Suppose that activity C has been completed within 5 weeks, what is the effect on the project completion time? 65
Chapter 4 Solutions
Essentials of Systems Analysis and Design (6th Edition)
Ch. 4 - Prob. 1MCh. 4 - Prob. 2MCh. 4 - Prob. 3MCh. 4 - Prob. 4MCh. 4 - Prob. 5MCh. 4 - Prob. 6MCh. 4 - Prob. 7MCh. 4 - Prob. 8MCh. 4 - Prob. 9MCh. 4 - Prob. 10M
Ch. 4 - Prob. 11MCh. 4 - Prob. 12MCh. 4 - Prob. 13MCh. 4 - Prob. 14MCh. 4 - Prob. 15MCh. 4 - Prob. 16MCh. 4 - Prob. 17MCh. 4 - Prob. 18MCh. 4 - Prob. 19MCh. 4 - Prob. 20MCh. 4 - Prob. 21MCh. 4 - Prob. 22MCh. 4 - Prob. 1RQCh. 4 - Describe several project evaluation criteria.Ch. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - Prob. 5RQCh. 4 - Prob. 6RQCh. 4 - What are the potential consequences of not...Ch. 4 - Prob. 8RQCh. 4 - Prob. 9RQCh. 4 - Prob. 10RQCh. 4 - Prob. 11RQCh. 4 - Prob. 12PECh. 4 - Prob. 13PECh. 4 - Prob. 14PECh. 4 - Prob. 15PECh. 4 - Prob. 16PECh. 4 - Prob. 17PECh. 4 - Prob. 18PECh. 4 - Prob. 19PECh. 4 - Prob. 20PECh. 4 - Prob. 21PECh. 4 - Assume monetary benefits of an information system...Ch. 4 - Prob. 23PECh. 4 - Prob. 24PECh. 4 - Prob. 25PECh. 4 - Prob. 26PECh. 4 - Prob. 27PECh. 4 - Prob. 28PECh. 4 - Prob. 29DQCh. 4 - Prob. 30DQCh. 4 - Prob. 31DQCh. 4 - Prob. 32DQCh. 4 - Prob. 33CPCh. 4 - Prob. 34CPCh. 4 - Prob. 35CPCh. 4 - Prob. 36CQCh. 4 - Prob. 37CQCh. 4 - Identify a preliminary set of tangible and...Ch. 4 - Prob. 39CQCh. 4 - If you were assigned to help Jim with this...Ch. 4 - Prob. 41CQCh. 4 - Prob. 42CQCh. 4 - In Question 4, you analyzed the risks associated...
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- Feasibility analysis is typically done during which systems development stage? a. investigation h. analysis c. design d. all of the abovearrow_forwardAny potential changes in system requirements that are identified or suggested after the design phase must ____________. a. go through a formal scope change process before work on them begins b. be evaluated in terms of how they might affect system performance c. require feasibility analysis d. all of the abovearrow_forwardA project estimator is working on estimates for a project that is very similar to a previous project, in that it has many of the same features and those features have similar costs. Each feature or deliverable will represent the same percentage of the total cost as it did for the previous project. He is using the _________ method of top-down estimating. a. ratio b. consensus c. apportion d. function point e. learning curvesarrow_forward
- Justify the use of Earned Value Management (EVM) to control costs and monitor project progress, and hypothesis as to why it is not used more often. For example, what are some general rules of thumb for deciding whether or not a cost fluctuation, a schedule variation is positive or negative?arrow_forwardSuggest the suitable models for the following mentioned scenarios and mention the reason. Process Visibility is necessary For Small and medium size interactive systems To explore unknown requirements To accommodate change at any time Need to reduce the risk of overall project failure Need of Risk Assessmentarrow_forwardAssume monetary benefits of an information system of $40,000 the first year and increasing benefits of $10,000 a year for the next five years (year 1 = $50,000, year 2 = $60,000, year 3 = $70,000, year 4 = $80,000, year 5 = $90,000). One-time development costs were $80,000 and recurring costs were $45,000 over the duration of the system’s life. The discount rate for the company was 11 percent. Using a six-year time horizon, calculate the net present value of these costs and benefits. Also calculate the overall return on investment and then present a break-even analysis. At what point does breakeven occur?arrow_forward
- Question 6 Part (a). One of the essential steps of the system development life cycle is preparing feasibility studies, including technical, economic, legal, operational and schedules feasibility. We have discussed these feasibilities in the interactive tutorials in details. Discuss these feasibilities briefly. And elaborate cost-benefit analysis under economic feasibilityarrow_forwardSystem development cost is impacted by the development model used. Which of the following development models is considered the highest in terms of cost compared to the other models? Select One Waterfall model Spiral model Incremental model Agile mode Which of the following statements is TRUE about Waterfall development model? Select One In waterfall model, system components can be developed separately. Takes into consideration the change of the requirements during the development process. Waterfall model is very efficient for projects that have well-known requirements at the beginning of the project. Waterfall model focuses on the constant re-evaluation of the design and risks involved. Agile model is similar to Extreme Programming model in terms of: Select One Agile model and Extreme Programming model have a fixed number of development iterations Agile model is not similar to Extreme Programming model in any way. To make sure requirements change is handled in…arrow_forwardQu.1: With the aid of a diagram(s), explain the importance of applying the concept of Work Breakdown Structure (WBS) in managing a typical software project using any SDLC of your choice. Qu.2: Discuss five reasons the project manager uses a Gantt chart as a tool, stating one particular software tool as an example. State the necessary steps to construct a Gantt chart. Qu.3: Identify any ten risk associated with managing IT projects. Define project risk management and outline the major processing involved.arrow_forward
- Given the following information, draw the project network diagram compute the ,early , late and slake time for each activity. Identify the critical path (CP) Use PERT to analyze the chance the delays on CP activities does not push the project duration beyond 40 days. ID Optimistic Most likely Pessimistic Predecessor A 2 4 6 None B 10 11 12 A C 5 6 9 A D 2 8 8 A E 5 6 15 B,C F 2 2 2 D G 3 5 7 E,F H 7 7 17 F I 3 6 8 G,Harrow_forwardGiven the following information, draw the project network diagram compute the, early, late, and slake time for each activity. Identify the critical path (CP) ID Optimistic Most likely Pessimistic Predecessor A 2 4 6 None B 10 11 12 A C 5 6 9 A D 2 8 8 A E 5 6 15 B,C F 2 2 2 D G 3 5 7 E,F H 7 7 17 F I 3 6 8 G, Harrow_forward
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