What Is a Benchmark Problem

question 28

Multiple Choice

What is a benchmark problem?

• A)A difficulty encountered when attempting to bring an accounting information system up to industry best practices.
• B)A method used to compare the efficiency of alternative accounting information systems.
• C)The cost-benefit tradeoff defined by the relationship between increased costs and increased benefits from a system.
• D)A method used to test the compatibility of a new accounting information system with existing hardware and software.

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Definitions:

Price Weighted Index

A stock market index in which each company's stock influences the index in proportion to its price per share.

Adjustable Rate Mortgage

A type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan according to market conditions.

Fixed Rate Mortgage

A mortgage in which the interest rate remains constant throughout the term of the loan.

Interest Rate

is the cost of borrowing money or the return on investment in a savings account, usually expressed as a percentage of the principal over a period of one year.