A Company Must Carefully Evaluate Each Alternative of Developing In-House

question 94

Multiple Choice

A company must carefully evaluate each alternative of developing in-house software,buying canned software,or using an outside third party when planning an AIS.Which statement below is true regarding such a decision?

• A)Generally the best overall decision is to buy a canned software and hardware system.
• B)The most efficient and effective systems are the ones developed in house.
• C)Using an outside third party to develop a system always gives the organization a significant competitive advantage.
• D)There is no single right answer to the build-or-buy decision.

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Definitions:

Credit Sales

Sales where payment is not made immediately by the buyer, but under terms and conditions agreed upon by the seller and the buyer.

Factor

An element contributing to a particular result or situation.

Cash Cycle

The period between the outlay of cash for goods and services and the cash recovery from sales.

Credit Sales

Sales made by a business where the payment is deferred to a later date, often involving credit terms.