INSY 3305 Chapter 2 True/False UPDATED
ACTUAL Exam Questions and CORRECT
Answers
1. Familiarity with the application and technology are major factors considered under economic
feasibility. - CORRECT ANSWER - False
2. Cost benefit analysis identifies the financial costs and benefits associated with a systems
project. - CORRECT ANSWER - True
3. To identify the costs and benefits related to the computer technology for a project the systems
analyst should rely on the business users. - CORRECT ANSWER - False
4. Happy customers is a tangible cost that can be included in a cost-benefit analysis. -
CORRECT ANSWER - False
5. A 20% increase in sales volume is a tangible benefit that can be included in a cost-benefit
analysis. - CORRECT ANSWER - True
6. A limitation of a formal cost-benefits analysis is that it contains the costs and benefits for just
one year. - CORRECT ANSWER - False
7. A high return on investment (ROI) results when benefits far outweigh the cost of a new project
or information system. - CORRECT ANSWER - True
8. How well a system is accepted by the users and incorporated into the ongoing operations of
the business is defined in the technical feasibility. - CORRECT ANSWER - False
9. Project size is an important consideration in technical feasibility. Larger projects create more
risk, both because they are more complicated to manage and because there is a greater chance
, that some important system requirements will be overlooked or misunderstood. - CORRECT
ANSWER - True
10. 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. - CORRECT ANSWER - True
11. 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. - CORRECT
ANSWER - False
12. User participation should be promoted throughout the development process to make sure that
the final system will be accepted and used. - CORRECT ANSWER - True
13. 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. - CORRECT ANSWER - True
14. 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. -
CORRECT ANSWER - False
15. 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. - CORRECT ANSWER - False
16. 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. - CORRECT ANSWER - False
17. Project initiation begins when the project sponsor identifies business value that can be gained
by using information technology. - CORRECT ANSWER - True
ACTUAL Exam Questions and CORRECT
Answers
1. Familiarity with the application and technology are major factors considered under economic
feasibility. - CORRECT ANSWER - False
2. Cost benefit analysis identifies the financial costs and benefits associated with a systems
project. - CORRECT ANSWER - True
3. To identify the costs and benefits related to the computer technology for a project the systems
analyst should rely on the business users. - CORRECT ANSWER - False
4. Happy customers is a tangible cost that can be included in a cost-benefit analysis. -
CORRECT ANSWER - False
5. A 20% increase in sales volume is a tangible benefit that can be included in a cost-benefit
analysis. - CORRECT ANSWER - True
6. A limitation of a formal cost-benefits analysis is that it contains the costs and benefits for just
one year. - CORRECT ANSWER - False
7. A high return on investment (ROI) results when benefits far outweigh the cost of a new project
or information system. - CORRECT ANSWER - True
8. How well a system is accepted by the users and incorporated into the ongoing operations of
the business is defined in the technical feasibility. - CORRECT ANSWER - False
9. Project size is an important consideration in technical feasibility. Larger projects create more
risk, both because they are more complicated to manage and because there is a greater chance
, that some important system requirements will be overlooked or misunderstood. - CORRECT
ANSWER - True
10. 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. - CORRECT ANSWER - True
11. 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. - CORRECT
ANSWER - False
12. User participation should be promoted throughout the development process to make sure that
the final system will be accepted and used. - CORRECT ANSWER - True
13. 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. - CORRECT ANSWER - True
14. 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. -
CORRECT ANSWER - False
15. 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. - CORRECT ANSWER - False
16. 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. - CORRECT ANSWER - False
17. Project initiation begins when the project sponsor identifies business value that can be gained
by using information technology. - CORRECT ANSWER - True
