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Question 174

Tangible benefits of investing in information technology (IT) include:

    Correct Answer: A

    Reducing transaction costs is a tangible benefit of investing in information technology. Tangible benefits are measurable and directly affect the financial performance of a company. By reducing transaction costs, organizations can save money, which is a direct and measurable benefit. Improved reliability, amortization of capital investment, and easier financial reporting are important benefits of IT, but they do not provide the same direct and tangible cost savings as reducing transaction costs.

Discussion
NowazOption: A

I think the correct answer should be A. Exhibit 1-36 in Module 1, pg. 181, there is a list of tangible benefits of IT investments and it makes no mention of easier financial reporting. However, it does mention greater financial returns, which can be attributed to lower cots, including transaction costs.

Rajiv8047Option: A

reducing transaction costs