software testing
Part 3
Scenario: An IT Manager has asked you to prepare a memo for research on one of the topics below with the best practices from the industry journals. The memo will be used by a steering committee to decide if internal projects are needed to prepare for a major transformation of software technology. In the original research presented by a consulting firm, the omission from the report was what to do about testing the new situation.
Please choose one of the following topics:
A. Testing Internal Controls
B. Testing Software System Security
C. Testing a Data Warehouse
D. Risk remediation
(1) State which one you have chosen
(2) State at least two best practices for the topic that you have chosen. For each one, please state full source of information (even if it is our textbook). You can also use reliable web sites on the Internet and please state the full URLs. Use the style of references as shown in the lesson.
(3) For each of the best practice in (2) for the chosen topic, please state why it is a good practice to follow.
Deliverable: A one to two page memo.
Here are three example citations in memo paragraphs, with three corresponding references: 1) a text book, 2) a tutorial lesson found on the internet, 3) a lesson on computing a return on investment found on the internet.
MEMORANDUM
To: Team Angel Steering Committee (TASC)
From: A-Team Analysts (ATA)
Re#1: Decision Support for Capital Budgeting
Re#2: Decision to acquire either Corporation A (A) or Corporation B (B)
Introduction:
This memo reports research findings into the decision to acquire either of two companies. The choice is mutually exclusive. The investment is $250,000 to acquire A or B, not both. TASC has requested an objective analysis and guidance in using the sophisticated methods for making either-or decisions such as this. The selected company will extend the current portfolio, product-line and resources for Team Angel, Inc.
An online assessment tool was used to simulate a series of what-if choices for entering ratios and observing the results. The lessons-learned from using of the tools are part of this memo. The following table shows the comparison.
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According to Brealey-Myers-Marcus two rules for deciding whether to go ahead with an investment project. The first is the NPV rule which endorses investing in projects that has a positive NPV when its cash flows are discounted at the opportunity cost of capital. The other is the rate of return rule which sets threshold of a” rate of return that is higher
than the opportunity cost of capital” (2003, p. 178). This memo has revealed the effectiveness of these rules, based on objective and complete data.
ATA encourages using additional key variables based on solid assumptive data for sales volume and price, market cost as a percent of sales, phasing payments for merchandise to leverage debt, and at least determine the terminal value just in case it may shift the decision. Since it is possible to generate free cash flow beyond the forecast period, it is a good idea to add a terminal value to the end of the period to represent the total present value received after the forecast period. Approaches are dividend growth, adjusted growth approach, and economic value added (Evans, 2000, pg 13). According to Ward (n.d.) a “breakeven analysis is used to determine how much sales volume your business needs to start making a profit.” The breakeven analysis is useful when for a pricing strategy following the merger, as part of a marketing plan or a business plan for the integrating the new entity.
References
Brealey-Myers-Marcus. (2003). Fundamentals of Corporate Finance (4th ed.). New York: McGraw-Hill.
Evans, M. H. (2000). Course 7: Meyers & Acquisitions – Part 2. Retrieved March 15, 2005 from http://exinfmvs.securesites.net/training/ specifically http://www.exinfm.com/training/pdfiles/course07-2.pdf
Ward, S. (n.d.). Break Even Analysis. Retrieved March 13, 2005 from http://sbinfocanada.about.com/cs/startup/g/breakevenanal.htm