August 1999
IM218 :INFORMATION MANAGEMENT

QUESTION 5

Total Marks: 20 Marks

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SUGGESTED SOLUTIONS
for Question 5
(a) Describe the operating lease and financing lease methods of financing an acquisition.

 

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(b) Which of the above two methods is most appropriate for purchasing :

(i) word-processing software?

(ii) computer monitors?

(iii) laser printers?

(1 mark each; any plausible justification is fine.)

 

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(c) A data centre has estimated a total overhead of $30,000 for the month of March. It has also estimated the following resource costs:
Paper 60,000 pages $15,000
Disk drive 10,000 MB $20,000
CPU time 800 hours $40,000
Personnel 2,500 hours $25,000

(i) Find the unit rates for the above resources.

(ii) The Engineering Department used the following resources in March :

Paper 1,500 pages
Disk drive 8MB
CPU time 15 hours
Personnel 80 hours

Calculate the charge for the Engineering Department for the month.

 

  

 

 



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(d) What is the difference between incremental and zero-based budgeting?

 

 [2]
(e) Which of the above two approaches is most appropriate for :

(i) insurance cover for hardware?

(ii) purchasing a new building?

(iii) salary costs?

 

  

 

 

[3]