Consider the situation you addressed in Problem and Exercise 5-35. Create numeric cost estimates for each of the costs you listed. Calculate the net present value and return on investment. Include a break-even analysis. Assume a 10 percent discount rate and a five-year time horizon.

Problem and Exercise 5-35.

Consider your use of a PC at either home or work and list tangible benefits from an information system. Based on this list, does your use of a PC seem to be beneficial? Why or why not? Now do the same using Table 5-3, the intangible benefits from an information system. Does this analysis support or contradict your previous analysis? Based on both analyses, does your use of a PC seem to be beneficial?

Table 5-3

Transcribed Image Text:

Competitive necessity • More timely information • Improved organizational planning • Increased organizational flexibility • Promotion of organizational learning and understanding • Availability of new, better, or more • More confidence in decision quality • Improved processing efficiency • Improved asset utilization • Improved resource control • Increased accuracy in clerical operations • Improved work process that can improve employee morale or customer satisfaction • Positive impacts on society • Improved social responsibility Better usage of resources ("greener") information Ability to investigate more alternatives Faster decision making