Question 1

Which of the following projects is the riskiest?
A) a project that managers are concerned will affect their roles and job descriptions
B) a project that requires technical expertise that your firm's IT employees do not have
C) a project that has a strict deadline, or sales will suffer
D) a project that will automate many clerical duties

Accepted Answer

The answer of Which of the following projects is the...

Question 2

Which of the following is a limitation of using a financial approach to evaluate information systems?
A) inability to measure ROI
B) inability to control vendor costs
C) inability to assess risk
D) inability to assess costs from organizational disruption

Accepted Answer

The financial approach typically focuses on quantifying tangible costs such as equipment, software, and labor. However, it may not capture the intangible costs, such as the impact on employee productivity, morale, or work processes caused by the disruption of implementing a new information system. This limitation makes it difficult to accurately assess the true costs and benefits of the system.

Question 3

Which method is used to assign weights to various features of a system?
A) information systems plan
B) scoring model
C) portfolio analysis
D) TCO

Accepted Answer

Scoring model is the method used to assign weights to various features of a system. This method helps in evaluating and comparing different options based on their score and determining the best possible option. Options A, C and D are not related to assigning weights to features of a system.

Question 4

The principal capital budgeting models for evaluating information technology projects are the payback method,the accounting rate of return on investment (ROI),the net present value,and the
A) future present value.
B) internal rate of return.
C) external rate of return.
D) ROPM.

Accepted Answer

The best choice for evaluating IT projects is the internal rate of return (IRR) model, which is a variation of the net present value method. The IRR model takes into consideration the time value of money and calculates the rate of return that the project is expected to generate. This provides a more accurate and comprehensive view of the project's financial viability compared to the payback method and accounting rate of return on investment. The external rate of return and ROPM are not commonly used capital budgeting models for IT projects.

Question 5

All of the following are intangible benefits of information systems except
A) improved asset utilization.
B) increased organizational learning.
C) improved operations.
D) reduced workforce.

Accepted Answer

Reduced workforce is a tangible benefit, meaning it involves a direct financial gain or cost reduction. Improved asset utilization, increased organizational learning, and improved operations are all intangible benefits, meaning they cannot be quantified in terms of financial gains or losses.

Question 6

Which of the following is not a tangible benefit of information systems?
A) reduced rate of growth in expenses
B) lower computer expenses
C) improved resource control
D) increased productivity

Accepted Answer

The answer of Which of the following is not a...

Question 7

Which method would you use to develop risk profiles for a firm's information system projects and assets?
A) information systems plan
B) scoring model
C) portfolio analysis
D) TCO

Accepted Answer

Portfolio analysis is used to develop risk profiles for a firm's information system projects and assets by evaluating them in terms of their potential benefits and risks.

Question 8

In using a portfolio analysis to determine which IT projects to pursue,you would
A) select the most low-risk projects from the inventory.
B) limit work to those projects with great rewards.
C) select only low-risk, high-reward projects.
D) balance high-risk, high reward projects with lower-risk projects.

Accepted Answer

Portfolio analysis involves balancing high-risk, high reward projects with lower-risk projects to create a balanced portfolio. This is because pursuing only low-risk projects may limit the potential rewards, while pursuing only high-risk projects may lead to failure and loss. The best approach is to have a mix of both, with a greater emphasis on lower-risk projects to ensure a higher chance of success.

Question 9

The central method used in a scoring model is to
A) inventory all of the organization's information systems projects and assets.
B) perform a weighted comparison of the criteria used to evaluate a system.
C) survey a large sample of managers on their objectives, decision-making process, and uses and needs for data and information.
D) interview a small number of top managers to identify their goals and criteria for achieving success.

Accepted Answer

The central method used in a scoring model is to perform a weighted comparison of the criteria used to evaluate a system. This involves assigning weights to different criteria based on their importance and then evaluating the performance of the system against each of these criteria. This approach allows for a systematic and objective evaluation of the system and helps to identify areas for improvement. The other options listed do not accurately describe the central method used in a scoring model.

Question 10

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.

Accepted Answer

When the benefits of an IT investment cannot be accurately forecasted, using the real option pricing model can help in evaluating the investment from a financial standpoint. This model assesses the value of a financial option to wait before committing to an investment, giving the investor more flexibility and thus reducing risk. It is particularly useful for evaluating long-term investments with uncertain outcomes.

Question 11

ROPMs value information systems similar to stock options,in that
A) ROPMs can be bought and sold like stocks.
B) a company's worth can be evaluated by the worth of their ROPMs.
C) initial expenditures on IT projects are seen as creating the right to pursue and obtain benefits from the system at a later date.
D) expenditures and benefits from IT projects are seen as inflows and outflows of cash that can be treated themselves like options.

Accepted Answer

ROPMs are seen as creating the right to pursue and obtain benefits from the system at a later date. This is different from stock options which represent ownership in a company and can be bought and sold. While a company's worth may be evaluated based on their IT systems, this is not the primary similarity between ROPMs and stock options. The expenditures and benefits from IT projects may be treated like options in some cases, but this is not the main concept behind ROPMs.

Question 12

The central method used in a portfolio analysis is to
A) inventory all of the organization's information systems projects and assets.
B) perform a weighted comparison of the criteria used to evaluate a system.
C) survey a large sample of managers on their objectives, decision-making process, and uses and needs for data and information.
D) interview a small number of top managers to identify their goals and criteria for achieving success.

Accepted Answer

The answer of The central method used in a portfolio...

Question 13

Which of the following statements best describes the effect that project structure has on overall project risk?
A) Highly structured projects are more complex, and run a higher risk of programmers and users misunderstanding the ultimate goals.
B) Projects with relatively undefined goals are more likely to be subjected to users changing requirements and to run a higher risk of not satisfying project goals.
C) Highly structured projects tend to be larger, affecting more organizational units, and run both the risk of out-of-control costs and becoming too difficult to control.
D) Less structured projects are more able to be quickly developed, tested, and implemented using cutting-edge RAD and JAD development techniques, and pose less risk of running up unforeseen costs.

Accepted Answer

Projects with relatively undefined goals are more likely to be subjected to users changing requirements and to run a higher risk of not satisfying project goals. A well-defined project structure can help to mitigate project risk by clearly defining goals and objectives, roles and responsibilities, and project deliverables. However, if the project structure is too rigid and inflexible, it can stifle creativity and limit the ability to adapt to changing circumstances. It is important to strike a balance between structure and flexibility in order to effectively manage project risk.

Question 14

You are using a capital budgeting method to assess the worth of your company's new information system.Which of the following costs would you include in measuring the cash outflow?
A) increased sales of products
B) hardware and software expenditures
C) labor expenditures
D) reduced costs in production and operation
E) both A and D
F) both B and C
G) A, B, C and D

Accepted Answer

When measuring the cash outflow for a capital budgeting method, it is important to consider the costs that will require an immediate cash payment. Hardware and software expenditures and labor expenditures fall under this category as they are upfront costs that will require payment. Increased sales of products and reduced costs in production and operation are considered cash inflows as they bring in revenue and reduce future expenses, respectively. Therefore, they should not be included in measuring the cash outflow.

Question 15

You have been hired by a pharmaceutical company to evaluate its inventory of systems and IT projects.Which types of projects would be best avoided?
A) any high-risk projects
B) any low-benefit projects
C) all high-risk, low-benefit projects
D) none, any project might be beneficial

Accepted Answer

It would be best to avoid all high-risk, low-benefit projects as they carry a high likelihood of failure while also providing minimal benefits to the company. Investing time and resources into such projects would not be a wise decision for the pharmaceutical company. All other projects could be evaluated on a case-by-case basis to determine their potential benefits and risks.

Question 16

The criteria used for evaluation in a scoring model are usually determined by
A) lengthy discussions among the decision-making group.
B) portfolio analysis.
C) the IS steering committee.
D) systems analysts.

Accepted Answer

The criteria used for evaluation in a scoring model are usually determined by lengthy discussions among the decision-making group because they are the ones who will ultimately use the model to make a decision. The decision-making group will have a good understanding of what factors are important in making their decision and can incorporate those factors into the scoring model.

Question 17

The worth of systems from a financial perspective essentially revolves around the issue of
A) total cost of ownership.
B) adherence to information requirements.
C) asset utilization.
D) return on invested capital.

Accepted Answer

The worth of systems from a financial perspective is primarily concerned with the return on invested capital. The other options, such as total cost of ownership, adherence to information requirements, and asset utilization, may be important considerations, but they are more operational in nature and do not necessarily reflect the financial value of the system. Return on invested capital is a key metric for determining the financial performance of a system or investment, and is therefore the best choice in this scenario.

Question 18

Which of the following project management variables indicates how well the project satisfies management objectives?
A) goals
B) risk
C) quality
D) scope

Accepted Answer

Quality is the project management variable that indicates how well the project satisfies management objectives. It refers to the degree to which the project meets the expected standards and requirements. Goals define what the project aims to achieve. Risk relates to the potential negative impact on the project's success. Scope defines the boundaries of the project and what is included or excluded.

Question 19

The project risk will rise if the project team and the IS staff lack
A) legacy applications as a starting point.
B) good equipment.
C) the required technical expertise.
D) financial studies and plans.

Accepted Answer

Technical expertise is crucial for ensuring that the project is executed efficiently and effectively. Without the required expertise, the project team and IS staff may struggle to identify and mitigate risks, resulting in an increased likelihood of project failure. Lack of legacy applications, good equipment, and financial studies can also create challenges, but they do not have as direct of an impact on project risk as technical expertise.

Question 20

In working with ROPMs and options valuation,a call option is a(n)
A) obligation to purchase an asset at a later date at a fixed price.
B) obligation to either purchase or sell an asset at a later date at a strike price.
C) right to purchase an asset at a later date at a strike price.
D) right to purchase or sell an asset at a later date at a fixed price.

Accepted Answer

The answer of In working with ROPMs and options valuation,a...

Quiz 14: Project Management business Value and Managing Change

Which of the following projects is the riskiest?

Which of the following is a limitation of using a financial approach to evaluate information systems?

Which method is used to assign weights to various features of a system?

The principal capital budgeting models for evaluating information technology projects are the payback method,the accounting rate of return on investment (ROI) ,the net present value,and the

All of the following are intangible benefits of information systems except

Which of the following is not a tangible benefit of information systems?

Which method would you use to develop risk profiles for a firm's information system projects and assets?

In using a portfolio analysis to determine which IT projects to pursue,you would

The central method used in a scoring model is to

To best evaluate,from a financial standpoint,an IT investment whose benefits cannot be firmly established in advance,you would use

ROPMs value information systems similar to stock options,in that

The central method used in a portfolio analysis is to

Which of the following statements best describes the effect that project structure has on overall project risk?

You are using a capital budgeting method to assess the worth of your company's new information system.Which of the following costs would you include in measuring the cash outflow?

You have been hired by a pharmaceutical company to evaluate its inventory of systems and IT projects.Which types of projects would be best avoided?

The criteria used for evaluation in a scoring model are usually determined by

The worth of systems from a financial perspective essentially revolves around the issue of

Which of the following project management variables indicates how well the project satisfies management objectives?

The project risk will rise if the project team and the IS staff lack

In working with ROPMs and options valuation,a call option is a(n)