How is a break-even analysis used to determine whether to develop or acquire an information system?

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Terms in this set (19)

During which phase of the systems development life cycle are interviews, questionnaires,
and observations used?

During the systems analysis phase

A click-wrap license __________.

is used primarily for downloaded software

How is a break-even analysis used to determine whether to develop or acquire an
information system?

The analysis tries to identify at what point (if ever) the system's tangible benefits equal its
tangible costs.

What type of license is used primarily for downloaded software?

A click-wrap license

What is vital when presenting a business case for an information system?

Concentrating on the issues about which top managers care most

What is true regarding the external acquisition of software?

An RFP is sent to vendors that might be interested in providing hardware and/or software for the
system.

What does the total cost of ownership of an information system reflect?

The cost of the acquisition and the costs associated with its ongoing use and maintenance

What is the first phase of the systems development life cycle?

Systems planning and selection

Planning and selection, analysis, design, and implementation and operation are parts of
what?

The systems development life cycle

Which type of analysis tries to identify at what point tangible benefits equal tangible
costs (if ever)?

Break-even

What should you do if your in-house IT staff is not equipped to develop a new system?

Outsourcing development of the new system

What is an intangible benefit of an information system?

Higher employee morale

What is a tangible benefit of an information system?

Lower costs

When information systems result in less efficient and less effective communication
among employees, and less productive uses of employee time than before the systems were implemented, this is known as __________.

the productivity paradox

What describes pseudocode?

It is independent of the actual programming language being used.

During which phase of the systems development life cycle do designers attempt to gain a thorough understanding of an organization's current way of doing things?

Systems analysis

Which type of software maintenance makes changes to an information system to evolve
its functionality?

Adaptive

The code for __________ is freely available for use and/or modification

Open source software

__________ uses a trial-and-error approach for discovering how a system should operate.

Prototyping

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ADVANCED MATH

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What is the purpose of break

A break-even analysis is a financial calculation that weighs the costs of a new business, service or product against the unit sell price to determine the point at which you will break even. In other words, it reveals the point at which you will have sold enough units to cover all of your costs.

What is determined by a break

What is break-even analysis used to determine? To determine how much in additional sales are necessary to cover a new expenditure or program.

How do you perform a break

How to calculate your break-even point.
When determining a break-even point based on sales dollars: Divide the fixed costs by the contribution margin. ... .
Break-Even Point (sales dollars) = Fixed Costs ÷ Contribution Margin..
Contribution Margin = Price of Product – Variable Costs..

What is the purpose of accounting profit break

This analysis allows the firm to determine the level of operations it will take to break even (earn zero profit) and to explore the relationship between volume, costs, and profits.