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.
E)a portfolio analysis.

Question

Quizplus · Accepted Answer

The real option pricing model is best suited for evaluating IT investments whose benefits cannot be firmly established in advance. This model is used to value investment opportunities that have the potential to yield uncertain future cash flows. It takes into account the option to delay or abandon a project, which can have significant impacts on the investment's overall value. Capital budgeting, scoring models, net present value, and portfolio analysis all rely on future cash flow projections that may not be reliable in cases where benefits are uncertain.

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