Why Is Cost-Benefit Analysis More Difficult for Information Systems Than

question 80

Essay

Why is cost-benefit analysis more difficult for information systems than for many other types of investments organizations make?

Distinguish between operating and non-operating income components of a business.

Recognize the components that affect the net profit margin ratio and its calculation.

Identify the sequence of preparing financial statements and understand the role of a trial balance.

Understand the classification of cash flows in financial reporting.

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Definitions:

Return On Investment

A measure used to evaluate the efficiency of an investment, calculated by dividing net profit by the cost of the investment.

Investment Center

A division or unit within a company for which the manager has responsibility for and authority over the unit's revenues, costs, and investments.

Decentralized Units

Subdivisions within a larger organization that operate with a degree of autonomy, often making their own decisions and managing their own operations.

Authority

Authority refers to the power or right given to an individual or organization to make decisions, direct others, and enforce obedience.