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1. What options does Atrium have for acquiring a new system?

* The two options are to make a new system or to buy a new system.

2. What are the pros and cons pf in-house development vs. purchasing a system?

* In house development pros are:

* satisfies any unique business requirements

* Minimizes changes in business procedures and policies

* Meet constraints of existing systems

* Meet constraints of existing technologies

* Satisfies unique security requirements

* Purchasing a system pros:

* Lower cost of development

* Less time to implement

* Proven reliability and performance benchmarks

* Requires less technical development staff

* Any upgrades are provided by the vendor

* Obtain input from other companies

3. IF the decision is made to purchase a new system, what are the three options for customizing the software?

* You can purchase a basic package that you can then customize to suit your company’s needs.

* You can negotiate directly with the vendor tp make enhancements that meet your needs by paying for the changes.

* You can purchase the package and make your own modifications if this is permitted under the terms of the software license.

4. Based on part C of the Systems Analyst’s Toolkit, what financial analysis tools should you use to evaluate the software acquisition options for Atrium? Explain how you would apply each of these tools.

* Total Cost of Ownership

* I would weigh the difference in the cost classifications between creating and purchasing and figure out which one in the long run would cost the company less to achieve.

* Cost-benefit analysis

* I would determine the initial development cost of the system

* Estimate annual benefits

* Determine annual operating cost

* Find a payback period

* Figure out the Return...