What Is Used as the Basis for Management to Make

question 47

Multiple Choice

What is used as the basis for management to make a "go/no go" decision regarding whether to proceed from the physical design phase to the implementation and conversion phase of the systems development life cycle?

• A) conceptual system design report
• B) physical systems design report
• C) systems design report
• D) implementation planning design report

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Definitions:

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, reflecting the fixed versus variable cost structure.

Clockworks Co.

A hypothetical or generic name that could be used to refer to a company specializing in mechanical devices, especially those involving gears and timekeeping mechanisms.

Contribution Margin Ratio

The ratio that indicates the percentage of each sale that exceeds the variable costs, calculated by subtracting variable costs from sales revenue and dividing by sales revenue.

Fixed Costs

Fixed costs are business expenses that do not change with the level of goods or services produced, such as rent, salaries, and insurance premiums, providing stability in business planning.