Information Technology Project Management
9th Edition
ISBN: 9781337101356
Author: Kathy Schwalbe
Publisher: Cengage Learning
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Expert Solution & Answer
Chapter 7, Problem 2DQ
Explanation of Solution
Basic Principles of cost management:
The basic principles of cost management are the key measures for reviewing an IT project in terms of profit, life cycle costs, tangible and intangible costs and benefits, direct and indirect costs, and reserves.
Profit:
- Profit of a project is referred to as the revenue of the project minus total expenditures spent on IT projects.
- The best way to increase the profits of IT project is by increasing the revenue of the company and reducing the expenditures spent during the project development.
Life cycle costs:
- Life cycle cost is defined as the total cost of ownership of a project throughout its life cycle.
- The project managers must consider the life cycle costs of the project while taking financial decisions on any project.
Tangible costs:
- A tangible cost represents the cost that can be linked up with a specific activity or product for task which includes purchasing of materials, hardware systems and paying employees.
Intangible costs:
- Intangible costs represent variety of costs that consists of losses in productivity, and goodwill of customer...
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Students have asked these similar questions
Identify and evaluate the many applications of the conventional costing approach in detail.
Please explain the distinction between capital and operating costs, and describe and define capital expenses.
Q2: Explain cost benefit analysis in detail. Describe the evaluation techniques of cost benefits.
Chapter 7 Solutions
Information Technology Project Management
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Similar questions
- When does consideration of marginal costs require decisions that just cannot be made elsewhere?arrow_forwardMake a distinction between one-time charges and ongoing expenditures, as well as between the benefits and costs associated with physical and intangible assets.arrow_forwardThe term "cost benefit analysis" (or "CBA") refers to a method of economic evaluation and assessment that totals up all of the monetary benefits and costs associated with a program. Explain.arrow_forward
- Identify and assess in depth the several uses of the traditional costing approach?arrow_forwardCompared to old costing methods, which ones do contemporary costing systems utilize and how do they differ? List two things to keep in mind when determining which cost drivers will be utilized for cost forecasting.arrow_forward
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