_____ Involves More Risk Than Other Changeover Methods

question 22

Multiple Choice

_____ involves more risk than other changeover methods.

• A) Direct cutover
• B) Pilot operation
• C) Parallel cutover
• D) Phased operation

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Definitions:

Capital Lease

A Capital Lease is a lease agreement that has the characteristics of a purchase agreement for accounting purposes.

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return.

Executory Costs

Refers to the costs related to executing a lease that are neither initially capitalized nor recognized in the income statement immediately, typically involving future operating expenses under a lease agreement.

Minimum Lease Payments

The lowest amount that a lessee is obligated to pay over the lease term, excluding costs for services such as insurance and maintenance.