In Using a Portfolio Analysis to Determine Which IT Projects

question 13

Multiple Choice

In using a portfolio analysis to determine which IT projects to pursue, you would

• A) select the most low-risk projects from the inventory.
• B) limit work to those projects with great rewards.
• C) select only low-risk, high-reward projects.
• D) balance high-risk, high reward projects with lower-risk projects.

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Definitions:

Variable Costing

An accounting method that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in product cost calculations.

Unit Product Cost

The total cost associated with producing a single unit of a product, including materials, labor, and overhead.

Common Fixed Expenses

Ongoing expenses that do not vary with production volume or business activity, shared across departments or products.

Business Segments

Distinct parts of a company that can be separately analyzed for profitability and operational efficiency.