When using a capital budgeting method in measuring the worth of an information system,which of the following related costs would you use to assess the cash inflow?
A)increased sales of products
B)hardware and software expenditures
C)labour expenditures
D)reduced costs in production and operation
E)both A and D

Question

Quizplus · Accepted Answer

When measuring the worth of an information system using a capital budgeting method, the related costs that would be used to assess the cash inflow are the increased sales of products and the reduced costs in production and operation. These two factors are typically the main drivers of cash inflows resulting from the implementation of an information system. Therefore, the best choice would be E, which includes both A (increased sales of products) and D (reduced costs in production and operation).

When Using a Capital Budgeting Method in Measuring the Worth