Chapter 2
Economic feasibility includes an assessment of financial impact in four categories: (1) development costs, (2) operational costs, (3) tangible benefits, and (4) intangible costs and benefits. True False
True
Economic feasibility is determined by identifying costs and benefits associated with the system, assigning values to them, and then calculating the cash flow and return on investment for the project. True False
True
Nicole has identified development and operational costs for a soon-to-be built information system. Her findings will be listed under economic feasibility in the analysis report. True False
True
Organizational feasibility can be evaluated by conducting a(n) stakeholder analysis. True False
True
Present value calculation takes inflation and time into account. True False
True
Project initiation begins when the project sponsor identifies business value that can be gained by using information technology. True False
True
ROI calculations do not consider the present value of future money. True False
True
System users are stakeholders who perform hands-on activities related to the project. True False
True
Technical feasibility focuses on whether the system can be built by examining the risks associated with the application. True False
True
The feasibility analysis helps the approval committee determine whether or not to proceed with a project. True False
True
User participation should be promoted throughout the development process to make sure that the final system will be accepted and used. True False
True
When analysts are unfamiliar with the business functional area, they have a greater chance of misunderstanding the users. True False
True
Peter is the vice president of accounting and finance. For the past year he has solely provided the resources necessary to get the just-in-time accounting system through the planning and analysis phases of the SDLC. Other managers have openly stated that the JIT system is not worth the investment. The SEC has just placed Peter under investigation for insider trading and the board has asked him to resign. This project is failing _____ feasibility analysis. organizational champion functional economic technical
organizational
The level of acceptance by the users of a system and the extent to which the new system will be incorporated into the operations of the organization are expressed in the _____ feasibility. economic familiarity functional organizational technical
organizational
What is example of procedural standard? All changes to a requirements document must be approved by the project manager All margins should be set to 1 inch Labels will appear in boldface text, left-justiï¬ed, and followed by a colon All of these None of these
All changes to a requirements document must be approved by the project manager
_____ feasibility is determined by identifying costs and benefits associated with the system. Economic Functional Organizational Intangible Technical
Economic
A feasibility analysis includes whether the project has been permitted by the CIO of the company. True False
False
A limitation of a formal cost-benefits analysis is that it contains the costs and benefits for just one year. True False
False
Determining whether the new system will be compatible with the existing technology that already exists in the organization is part of the organizational feasibility study. True False
False
Development costs that are examined during feasibility analysis include costs for software licenses and software upgrades. True False
False
Economic feasibility focuses on whether the system can be built by examining the risks associated with the users' and analysts' familiarity with the application, familiarity with the technology, and project size. True False
False
Familiarity with the application and technology are major factors considered under economic feasibility. True False
False
Happy customers is a tangible cost that can be included in a cost-benefit analysis. True False
False
How well a system is accepted by the users and incorporated into the ongoing operations of the business is defined in the technical feasibility. True False
False
It is not necessary to assign dollar values to intangible costs and benefits; it is almost impossible to come up with reasonable numbers for all of the costs and benefits that haven't happened yet. True False
False
Lauren, a systems analyst, is concerned that she and the end-users at her company do not have experience with a new scanner technology that will soon be implemented. This identified risk falls under economic feasibility. True False
False
Natalie has been asked by her project manager to list the possible intangible benefits for a new system. Her list will include reduced expenses for the company. True False
False
The champion is a high-level IS executive who initiates the system request and supports the project by providing time, resources, and political support within the organization by communicating the importance of the system to other organizational decision makers. True False
False
The formula for net present value (NPV) is the ratio of (Total benefits - Total Costs) to Total Costs. True False
False
The return on investment (ROI) should be used as the sole indicator of a project's worth because it considers the end points of the investment, not the cash flow in between. True False
False
Unfamiliarity with the technology is not a source of technical risk because there is an accepted learning curve associated with using technology that has not been used before within the organization. True False
False
_____ is the process of examining the technical, economic, and organizational pros and cons of developing a new system. Committee approval Feasibility analysis Functionality determination Risk analysis System request
Feasibility analysis
Which of the following factors could be included in a technical risk assessment? Cost of a new Web server Cost of hiring a Webmaster No previous experience with Java within the IS department Some fear of job loss among order entry department personnel All of these
No previous experience with Java within the IS department
A 20% increase in sales volume is a tangible benefit that can be included in a cost-benefit analysis. True False
True
A high return on investment (ROI) results when benefits far outweigh the cost of a new project or information system. True False
True
A senior executive who has control of business resources may serve as the approval committee for a systems request. True False
True
As the project champion, the VP of manufacturing persuades other senior staff to continue supporting the new information system. True False
True
Calculating the break-even point helps in understanding how long it will take before the system creates real value for the organization. True False
True
Cost benefit analysis identifies the financial costs and benefits associated with a systems project. True False
True
A decision making body that considers system requests and makes the initial determination of whether to investigate the proposal for a new or improved system is called the _____ committee. approval executive body feasibility sponsorship requesting
approval
All modules of code should include a header that lists the programmer, last date of update, and a short description of the purpose of the code. It is example of _______ standard. documentation coding business procedural specification requirement
coding
Operational costs that are examined during feasibility analysis include _____. data conversion cost development training user training equipment upgrades initial consultant fees
equipment upgrades
Feasibility analysis may be defined as a(n) _____. assessment of ability of the ultimate users of the system to accept the system and incorporate it into the ongoing operations of the organization determination of the extent to which the system can be technically designed, developed, and installed guide to determining whether to proceed with a project identification of only the costs and benefits associated with the project none of these
guide to determining whether to proceed with a project
The project champion is a(n) _____. high-level IS executive who is usually but not always the project sponsor who initiated the system request mid-level IS manager who has the responsibility of controlling and directing the development process high-level non-IS executive who is usually but not always the project sponsor who initiated the system request senior member of the user group who participated in the RAD sessions none of the above
high-level non-IS executive who is usually but not always the project sponsor who initiated the system request
If end users feel fearful or threatened by a proposed new system, this factor should be included as a part of the _____. economic feasibility assessment organizational feasibility assessment system proposal system request technical feasibility assessment
organizational feasibility assessment
The person that identifies the business value that can be gained from using information technology is called the _____. manager project sponsor staff member system analyst system request
project sponsor
The four elements commonly found on a system request are _____. economic, organizational, technical, and operational feasibility project sponsor, business need, business requirements, and business value risk analysis, familiarity, project size, and cost-benefit analysis training, software, installation, and equipment upgrades, licensing fees, repairs, and charges
project sponsor, business need, business requirements, and business value
In order to approve a system request, the approval committee must know all of the details of the ultimate system to be developed. the high level functionality of the system. what the screens and reports will look like in the final system. who the end users of the system will be and exactly how they will use it in their jobs. all of these.
the high level functionality of the system.
