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MIS 4200 System and Database Analysis, Design, and
Development
Systems Review Questions 02
Covers Chapter 3:86100
Due: By Thursday 2/17/2011
DO NOT FORGET to type you name.
Student Name: ______________________________________
TrueFalse Questions
1
.
Economic feasibility is a process of identifying the financial benefits and costs
associated with a development project.
T
F
2
.
Opening new markets and increasing sales opportunities is a tangible benefit.
T
F
3
.
The time value of money (TVM) compares present cash outlays to future expected
returns.
T
F
4
.
Because many projects may be competing for the same investment dollars and may
have different useful life expectancies, all costs and benefits must be viewed in
relation to their present rather than future value when comparing investment options.
T
F
5
.
Using a discount rate of 10 percent, the present value of a $2,500 benefit received 5
years from now is $1,552.30.
T
F
6
.
Using a discount rate of 14 percent, the present value of a $10,000 benefit received 5
years from now is $5,500.49.
T
F
7
.
Using a discount rate of 12 percent, the present value of a $50,500 benefit received 2
years from now is $40,258.29.
T
F
8
.
The objective of return on investment (ROI) analysis is to discover at what point
cumulative benefits equal costs.
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F
9
.
If the net present value (NPV) of all costs is $100,000 and the NPV of all benefits is
$170,000, then the ROI would be 35 percent.
T
F
1
0
.
Most techniques for analyzing economic feasibility employ the time value of money
concept.
T
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 Spring '11
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