Use of Software-Generated Information to Make Organizational Decisions
Use of software-generated information to make organizational decisions
CONTENTS
1 Introduction…………………………...………………………3
2 Analysis
4.1Use appropriate information processing tools………………………..4
4.2 Prepare a project plan for an activity and determine the critical path.5
4.3 Use financial tools for decision making……………………………..7
3 Conclusions………………………………………………….11
References…………………………..…………………………11
Introduction
The net present value method works out the present values of all items of income and expenditure related to an investment at a given rate of return, and then works out a net total. If it is positive, the investment is considered to be acceptable. If it is negative, the investment is considered to be unacceptable.
The internal rate of return method of evaluating investments is an alternative to the NPV method. The NPV method of discounted cash flow determines whether an investment earns a positive or a negative NPV when discounted at a given rate of interest. If the NPV is zero (that is, the present values of costs and benefits are equal) the return from the project would be exactly the rate used for discounting.
This assignment introduces NPV and IRR, and calculates the company NPV and IRR
Analysis
4.1Use appropriate information processing tools
Figure shows relation of information system to the levels of organization. The information needs are different at different organizational levels. Accordingly the information can be categorized as: strategic information, managerial information and operational information.
Strategic information is the information needed by top most management for decision making. For example the trends in revenues earned by the organization are required by the top management for setting the policies of the organization. This information is not required by the lower levels in the organization. The information systems that provide these kinds of information are known as Decision Support
CONTENTS
1 Introduction…………………………...………………………3
2 Analysis
4.1Use appropriate information processing tools………………………..4
4.2 Prepare a project plan for an activity and determine the critical path.5
4.3 Use financial tools for decision making……………………………..7
3 Conclusions………………………………………………….11
References…………………………..…………………………11
Introduction
The net present value method works out the present values of all items of income and expenditure related to an investment at a given rate of return, and then works out a net total. If it is positive, the investment is considered to be acceptable. If it is negative, the investment is considered to be unacceptable.
The internal rate of return method of evaluating investments is an alternative to the NPV method. The NPV method of discounted cash flow determines whether an investment earns a positive or a negative NPV when discounted at a given rate of interest. If the NPV is zero (that is, the present values of costs and benefits are equal) the return from the project would be exactly the rate used for discounting.
This assignment introduces NPV and IRR, and calculates the company NPV and IRR
Analysis
4.1Use appropriate information processing tools
Figure shows relation of information system to the levels of organization. The information needs are different at different organizational levels. Accordingly the information can be categorized as: strategic information, managerial information and operational information.
Strategic information is the information needed by top most management for decision making. For example the trends in revenues earned by the organization are required by the top management for setting the policies of the organization. This information is not required by the lower levels in the organization. The information systems that provide these kinds of information are known as Decision Support
References: Recruitment: Accessed on 2012/06/23 http://baike.baidu.com/view/3958643.htm#4 Types of information system: Accessed on 2012/06/24 http://www.freetutes.com/systemanalysis/types-of-information-system.html NPV Definition: Accessed on 2012/06/24 http://www.investopedia.com/terms/n/npv.asp IRR Definition: Accessed on 2012/06/24 http://www.investopedia.com/terms/i/irr.asp