Pearson eText for Essentials of Systems Analysis and Design -- Instant Access (Pearson+)
6th Edition
ISBN: 9780137612420
Author: Joseph Valacich, Joey George
Publisher: PEARSON+
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Chapter 4, Problem 30DQ
Explanation of Solution
Cost-benefit analysis technique:
- The cost-benefit analysis technique, which is best for assessing the economic feasibility of a project, is Return on Investment (ROI).
- The ROI technique is used to measure the effectiveness of one investment or several investments.
- The value of ROI can be measured as the ratio of overall benefits by overall costs...
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Imagine that you are interviewing for a jobwhen the interviewer asks you which costbenefit analysis technique is best for assessing a project’s economic feasibility. Whatwould your response be?
A 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.
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Chapter 4 Solutions
Pearson eText for Essentials of Systems Analysis and Design -- Instant Access (Pearson+)
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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Similar questions
- List and discuss the different types of project feasibility factors. Is any factor most important? Why or why not?arrow_forwardScenario One: Assume you are put in charge of launching a new website for a local nonprofit organization. What costs would you need to account for? Make a list of expected costs and benefits for the project. You don’t need to list values, just sources of expense. Consider both one-time and recurring costs. Consider the situation you addressed in the previous question. Create numeric cost estimates for each of the costs you listed. Calculate the net present value and return on investment. Include a break-even analysis. Assume a 10 percent discount rate and a five-year time horizon. Scenario Two: Assuming monetary benefits of an information system at $85,000 per year, one-time costs of $75,000, recurring costs of $35,000 per year, a discount rate of 12 percent, and a five-year time horizon, calculate the net present value of these costs and benefits of an information system. Also calculate the overall return on investment of the project and then present a break-even analysis. At what…arrow_forwardThe board of directors of a company decides that senior management has to be rewarded in order to achieve the company's objectives. The board of directors selects whether or not to award bonuses based on growth in share value at the end of each fiscal year. Bonuses will be given in shares, which the managers can keep or sell on the open market. What are the ramifications of implementing a bonus system like this?arrow_forward
- When calculating the NPV of a project, the time value of money is an important consideration. Is the time worth of money just as essential in low-inflation periods as it is in high-inflation periods? Explain your response.arrow_forwardThe Spiral Model may be useful for planning and managing even the smallest of projects.arrow_forwardConsider that you are developing a project where people would choose to test themselves to go without using a computer for a fixed period of time. Describe how you would set up the project and why. What period of time would you set up? Why? Who would you recruit to participate? Why? What would you define as a computer or off limits? Why? Which of the following would be acceptable?Smartphones Having someone else use the computer for you? reading printouts? Using GPS?arrow_forward
- Consider that you are developing a project where people would choose to test themselves to go without using a computer for a fixed period of time. Describe how you would set up the project and why. Would you be willing to do go "computerless"?How long do you think you could commit to?What would be particularly challenging for you to avoid?What modifications would you have to make for school?What modifications would you have to make for socializing?How would this affect others?What things could you get done?arrow_forwardGiven the following information for a one-year project, answer the following questions. Recall that PV is the planned value, EV is the earned value, AC is the actual cost, and BAC is the budget at completion. PV = $23,000 EV = $20,000 AC = $25,000 BAC = $120,000 What is the cost variance, schedule variance, cost performance index (CPI), and scheduleperformance index (SPI) for the project? How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget? Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned? Use the schedule performance index (SPI) to estimate how long it will take to finish this project. Sketch the earned value chart based for this project, using Figure 7-5 as a guide.arrow_forwardIf you're a software developer, how can you come up with an accurate cost estimate for your project?arrow_forward
- The time value of money is a key factor to take into account when determining a project's net present value (NPV). Is the time value of money just as important during times of low inflation as it is during times of high inflation? Describe your reaction.arrow_forwardIf you are a developer of software, how can you determine an accurate cost estimate for the project you are working on?arrow_forwardGiven the following information for a one-year IT project of Gulf Hospital System, answer the following questions. Recall that PV is the planned value, EV is the earned value, and AC is the actual cost. PV = $ 32,000 EV = $ 25,000 AC = $ 36,000 Calculate the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the given project. Justify the results.arrow_forward
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