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 B and C

Question

Quizplus · Accepted Answer

The hardware and software expenditures (Choice B) and labor expenditures (Choice C) are the costs associated with the implementation of the information system, which should be included in measuring cash outflow. Increased sales of products (Choice A) and reduced costs in production and operation (Choice D) are potential benefits of the new system and should be considered in measuring the cash inflows.

You Are Using a Capital Budgeting Method to Assess the Worth