To best evaluate, from a financial standpoint, an IT investment whose benefits cannot be firmly established in advance, you would use
A) capital budgeting.
B) the real option pricing model.
C) a scoring model.
D) the net present value.

Question

Quizplus · Accepted Answer

When investing in IT projects whose benefits cannot be firmly established in advance, the real option pricing model is the best choice. This model takes into account the different options and uncertainties associated with the project and evaluates them in terms of financial viability. Capital budgeting and the net present value method are useful for evaluating projects with well-established benefits and costs, while scoring models are subjective and may not account for all financial factors.

To Best Evaluate, from a Financial Standpoint, an IT Investment