Question 1

This financial calculation provides a percentage rate that measures the relationship between the amount the business gets back from an investment and the amount invested.
A) IRR
B) ROI
C) Payback
D) NPV
E) EVA

Accepted Answer

ROI (Return on Investment) measures the percentage rate of return on an investment based on its cost. It is calculated by dividing the net profit by the initial investment.

Question 2

The responsibility of the IT organization is to:
A) Manage core business functions like selling, accounting and manufacturing.
B) Partner with business managers to insure the right IS exists to support the business strategy.
C) Set the business strategy.
D) Have sole responsibility for building information systems for the organization.
E) Design business processes.

Accepted Answer

The IT organization is responsible for working closely with business managers to understand the needs of the business and design and implement information systems that support the business strategy. They are not responsible for managing core business functions, setting the business strategy, building information systems in isolation, or designing business processes.

Question 3

This method of IT funding is the most equitable,as the costs associated with IT are based on use.However,it can be difficult and tedious to calculate the usage costs.
A) Allocation
B) Corporate budgeting
C) Usage
D) Distributed
E) Chargeback

Accepted Answer

The method described is chargeback, where the costs are allocated based on usage. While it may be difficult to calculate usage costs, it is the most equitable approach.

Question 4

In the early days of IT,the CIO would report to the ____ as IT was seen as a way to control costs.As technology has become more strategic and able to deliver a competitive advantage,CIOs now report directly to the ____.
A) CFO; CEO
B) CEO; CFO
C) CFO; COO
D) COO; CEO
E) CEO; CTO

Accepted Answer

Initially, IT was primarily viewed as a cost center, so the Chief Information Officer (CIO) would report to the Chief Financial Officer (CFO), who manages the organization's finances. As IT's role evolved to drive strategic advantages, the reporting line shifted to the Chief Executive Officer (CEO), reflecting IT's elevated strategic importance.

Question 5

Cloud computing providers often take responsibility for managing data and applications for a firm.These cloud computing provider's management of a firm's information must consider international transfer of information.This is an example of which global IT issue?
A) Political stability
B) Transparency
C) Sourcing
D) Data flow across borders
E) Business Continuity Planning

Accepted Answer

The answer of Cloud computing providers often take responsibility for...

Question 6

Scorecards provide a summary of information gathered over a period of time. Another common IT monitoring tool is the _____________.
A) baseline
B) metrics
C) portfolio
D) dashboard
E) monitor

Accepted Answer

The best choice for another common IT monitoring tool is a dashboard. A dashboard provides real-time information on the status of key performance indicators (KPIs) and allows for quick identification of any issues or trends. Baselines, metrics, and portfolios are related to IT monitoring but are not necessarily monitoring tools themselves. A monitor is a broader term that could refer to any type of monitoring tool, including a dashboard.

Question 7

Mary is recommending IT investments in the neighborhood of $250 million for her company. However,the board is hesitant since it's such as capital-intensive project. If the project fails the company could go out of business. What financial calculation should they use?
A) ROI
B) NPV
C) EVA
D) IRR
E) FV

Accepted Answer

The answer of Mary is recommending IT investments in the...

Question 8

A local marketing firm is considering launching a new and extensive social media marketing campaign. This investment of resources is being looked at through the length of the project since it is anticipated to last at least 5 years. What financial calculation should be used to compute the time value of money?
A) ROI
B) NPV
C) EVA
D) IRR
E) TCO

Accepted Answer

NPV (Net Present Value) is used to calculate the time value of money for long-term projects by discounting future cash flows to their present value.

Question 9

Joe works for a company where the IT department charges him for the number of CRM login accounts that are in his department. What type of IT funding model is his company deploying?
A) Allocation
B) Corporate budgeting
C) Usage
D) TCO
E) Chargeback

Accepted Answer

The answer of Joe works for a company where the...

Question 10

Denise works for a company where the IT department charges her department for actual usage of a SharePoint server,determining how often users log in and how much storage space her department consumes. What type of IT funding model is the company deploying?
A) Allocation method
B) Corporate budget method
C) Usage method
D) Distributed method
E) Chargeback method

Accepted Answer

The company is deploying a chargeback method for funding IT, where the IT department charges each department for actual usage of a SharePoint server based on login frequency and storage consumption.

Question 11

A company that seeks an IT portfolio that lowers costs as the primary business objective will be more likely to increase spending on ___________ because these applications can help automate processes.
A) strategic systems
B) infrastructure
C) informational systems
D) transactional systems
E) social media

Accepted Answer

Transactional systems are designed to automate and support operational processes, such as accounting, payroll, and inventory management. By investing in these systems, a company can reduce the need for manual labor and lower costs. In contrast, strategic and informational systems tend to be more focused on improving decision-making and providing competitive advantages, so they may not be as effective at reducing costs. Infrastructure and social media may also be important components of an IT portfolio, but they are unlikely to be the primary focus for a company seeking to lower costs.

Question 12

In order to get support and approval for an IT investment,a manager must often create a(n) ________________.
A) IT portfolio
B) community plan
C) business case
D) workflow diagram
E) business technology plan

Accepted Answer

A business case is a proposal that outlines the benefits and costs of an IT investment, including estimates of return on investment and potential risks. It is a key tool for getting buy-in from executives and other stakeholders who must approve the investment. The other options are not typically used for this purpose.

Question 13

Critical to the business case is the identification of both _________ and ________.
A) costs, risks
B) costs, benefits
C) advantages, disadvantages
D) assumptions, risks
E) benefits, detriments

Accepted Answer

The identification of both costs and benefits is critical to the business case as it allows for a comprehensive analysis of the potential return on investment. While the identification of risks and assumptions is also important, it may not provide a clear picture of the potential benefits and costs associated with the proposed project or investment.

Question 14

Which dimension of the balanced scorecard answers the question "How do customers see us?"
A) Customer perspective
B) Innovating and learning perspective
C) Internal business perspective
D) Financial perspective
E) Supplier perspective

Accepted Answer

The dimension of the balanced scorecard that answers the question "How do customers see us?" is the customer perspective. This dimension focuses on understanding the needs and requirements of customers and measuring how well the organization is meeting those needs. It includes metrics such as customer satisfaction, customer retention, and market share.

Question 15

Which of the following should a manager expect from the IS organization?
A) Promotion of enterprise security.
B) Participation in setting and implementing strategic direction.
C) Innovation of current processes.
D) Management data, information and knowledge
E) All of the above

Accepted Answer

A manager should expect all of the above from the IS organization. The IS organization plays a crucial role in promoting enterprise security, participating in setting and implementing strategic direction, innovating current processes and managing data, information, and knowledge.

Question 16

A CIO must spend part of the day performing _____ tasks and the some part of the day working on operational tasks.Rarely can a CIO focus on just one task in any given day.
A) Administrative
B) Strategic
C) Database
D) Financial
E) Technology

Accepted Answer

The answer of A CIO must spend part of the...

Question 17

Sam has just purchased 10 new high speed color laser printers for his company. He is very excited because he got a 40% discount and paid only $2,990 for each unit. His boss,Joe,wants to know things such as operating costs,support,overhead,etc.for the printers. Joe wants to know this value:
A) RCO
B) TCO
C) ROI
D) NPV
E) EVM

Accepted Answer

Joe's inquiry about operating costs, support, overhead, etc. refers to the total cost of ownership (TCO) of the printers. TCO takes into account all expenses related to owning and operating a product, including initial purchase price, maintenance, repairs, and disposal. It is an important metric for businesses to consider when making purchasing decisions.

Question 18

Activity based costing _____________
A) groups costs into meaningful buckets that are then distributed based on the activity or product they support.
B) is useful for allocating small project work.
C) charges all costs to "cost centers".
D) considers only initial capital investments.
E) calculates ongoing maintenance costs.

Accepted Answer

Activity based costing is a method of allocating costs to products or services based on the specific activities or processes involved in producing them. This allows for a more accurate understanding of the costs associated with each product or service, and can help businesses make better decisions about pricing and resource allocation. It is not limited to allocating costs to cost centers, nor does it only consider initial capital investments or ongoing maintenance costs. While it may be useful for allocating small project work, that is not the primary purpose of activity based costing.

Question 19

This is a plan designed to counter a manmade or natural disaster that could cripple an enterprise.
A) Business Continuity Plan
B) Disaster Recovery Plan
C) Business Disaster Plan
D) Disaster Business Case
E) Business-IT Maturity Model

Accepted Answer

The answer of This is a plan designed to counter...

Question 20

Building a business case for an IT investment:
A) Allows management to establish priorities for investing in different projects.
B) Helps gain commitment for the IT investment from business managers.
C) Creates a basis for monitoring the investment.
D) Identifies the benefits of the investment.
E) All of the above.

Accepted Answer

All of the above are correct. Establishing priorities, gaining commitment, monitoring the investment, and identifying benefits are all key components of building a business case for IT investment.

Quiz 7: Cost Recovery of Information Systems

This financial calculation provides a percentage rate that measures the relationship between the amount the business gets back from an investment and the amount invested.

The responsibility of the IT organization is to:

This method of IT funding is the most equitable,as the costs associated with IT are based on use.However,it can be difficult and tedious to calculate the usage costs.

In the early days of IT,the CIO would report to the as IT was seen as a way to control costs.As technology has become more strategic and able to deliver a competitive advantage,CIOs now report directly to the .

Cloud computing providers often take responsibility for managing data and applications for a firm.These cloud computing provider's management of a firm's information must consider international transfer of information.This is an example of which global IT issue?

Scorecards provide a summary of information gathered over a period of time. Another common IT monitoring tool is the _____________.

Mary is recommending IT investments in the neighborhood of $250 million for her company. However,the board is hesitant since it's such as capital-intensive project. If the project fails the company could go out of business. What financial calculation should they use?

Joe works for a company where the IT department charges him for the number of CRM login accounts that are in his department. What type of IT funding model is his company deploying?

Denise works for a company where the IT department charges her department for actual usage of a SharePoint server,determining how often users log in and how much storage space her department consumes. What type of IT funding model is the company deploying?

A company that seeks an IT portfolio that lowers costs as the primary business objective will be more likely to increase spending on ___________ because these applications can help automate processes.

In order to get support and approval for an IT investment,a manager must often create a(n) ________________.

Critical to the business case is the identification of both _ and .

Which dimension of the balanced scorecard answers the question "How do customers see us?"

Which of the following should a manager expect from the IS organization?

A CIO must spend part of the day performing _____ tasks and the some part of the day working on operational tasks.Rarely can a CIO focus on just one task in any given day.

Sam has just purchased 10 new high speed color laser printers for his company. He is very excited because he got a 40% discount and paid only $2,990 for each unit. His boss,Joe,wants to know things such as operating costs,support,overhead,etc.for the printers. Joe wants to know this value:

Activity based costing _____________

This is a plan designed to counter a manmade or natural disaster that could cripple an enterprise.

Building a business case for an IT investment: