Identify the Key Factors to Consider When Deciding Whether to Make

question 11

Essay

Identify the key factors to consider when deciding whether to make or buy a new information system. Develop a table that compares the make vs. by decision using these factors.

---

Definitions:

Net Present Value

An assessment that measures the current value of a dollar against its future value, considering the effects of inflation and returns.

Market Rates

The prevailing interest rates available in the marketplace for loans and deposits, set by the dynamics of supply and demand.

Net Present Value

The disparity between the current value of cash coming in and the current value of cash going out over a certain time frame, employed in capital budgeting to evaluate an investment or project's profitability.

Independent Projects

Investment projects that do not affect each other’s outcomes or acceptability. Evaluating one does not impact the consideration of another.