ROPMs (Real Options Pricing Models)value Information Systems Similar to Stock

question 32

Multiple Choice

ROPMs (real options pricing models) value information systems similar to stock options,in that

• A)ROPMs can be bought and sold like stocks.
• B)a company's worth can be evaluated by the worth of their ROPMs.
• C)initial expenditures on IT projects are seen as creating the right to pursue and obtain benefits from the system at a later date.
• D)expenditures and benefits from IT projects are seen as inflows and outflows of cash that can be treated themselves like options.
• E)the price paid today for information systems reflects their future cash flows.

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Definitions:

Development Process

A structured series of activities or steps designed to create a new product, service, or system.

Idea Screening

The process of evaluating new ideas to determine their potential success before investing significant resources into development.

Business Analysis

The practice of identifying business needs and determining solutions to business problems, often involving the evaluation of business structure, processes, and operations.

Product Development

The process of creating, designing, and bringing a new product to the market.