1. Which of the following is a question that companies should answer when preparing the business case for an IT investment?
a. How much will it cost?
b. What are the risks?
c. What are the alternatives?
d. How will success be measured?
e. All of the above

2. What is the first step in the economic justification process?
a. Identify potential solutions.
b. Assess the value proposition.
c. Assess business requirements.
d. Estimate costs.
e. All of the above

3. Which of the following is a not an example of a complementary change necessary to allow an IT initiative to achieve its goals?
a. Outsource the IT initiative.
b. Retrain employees.
c. Redefine job descriptions.
d. Provide incentives for employees to make the change successfully.
e. None of the above

4. Which of the following is not an example of benefits of an IT investment?
a. Increased revenues from access to new markets
b. Decreased costs from automating manual tasks
c. Facilitating employee work-from-home arrangements
d. Allowing compliance with new federal regulations
e. Reducing the number of inventory count errors
f. All of the above

5. Which of the following can be used to quantify benefits on an IT investment?
a. Gathering expert opinions
b. Bench-marking against competitor performance
c. Comparing against the probability of future benefits if investment is forgone
d. Conducting simulations
e. All of the above

6. Which of the following are examples of direct costs of acquiring and implementing an IT investment?
a. Cost of hiring consultants to assess system requirements
b. Personnel costs of the project team
c. Training costs of employees who will use the system
d. Cost of new computer hardware necessary to run the system
e. All of the above are direct costs of acquiring and implementing an IT investment.

7. Which of the following are not examples of operating costs for an IT investment?
a. Costs of routine hardware replacements over time
b. Cost of contract for help desk support
c. Costs of disposal of electronics at end of life
d. Costs of software license renewals
e. All of the above are examples of operating costs.

8. Which of the following is not a category of IT initiative risk?
a. Alignment
b. Technological
c. Financial misstatement
d. Solution

e. All of the above are examples of IT initiative risk.

9. If an IT project costs $150,000 and returns net cash flows of $100,000 per year, what is the payback period?
a. 1 year
b. 1.5 years
c. 2 years
d. 2.5 years
e. None of the above

10. If an IT project costs $150,000 and returns net cash flows of $100,000 per year, what is the accounting rate of return?
a. 33 percent
b. 50 percent
c. 67 percent
d. 75 percent
e. None of the above