Big Data

Big Data is the collection and analysis of a large amount of data

It then helps find trends and understand customer needs

Benefits:

1. Conversion to useful information

2. Gaining competitive advantage
3. Driving innovation
The 5 V's

Big data has a role to play in information management

1. Volume
There's just more data available nowadays

For example, data captured from social media.

2. Velocity
You can get data much quicker
3. Variety
Modern data takes many different forms - Video, audio, written etc

(Structured data is often numerical data whereas unstructured data may be in

the format of email or video)
4. Veracity
This refers to truthfulness. Data needs to be reliable and truthful. 

Hidden biases in the data can be a problem too (eg Overstating demand
whereas in truth it's not as high as we like to think it could be)
5. Value
This refers to data's usefulness to the business. 

Big data is only valuable if its insights are valuable (help decision making)
A company is considering whether to buy an item of equipment for $20,000. The project
would also require another initial investment of $8,000.

The cash profits for the project would be

year cash profit$
1 15000
2 20000
3 12000
4 7000
The equipment would have a resale value of $5,000 at the end of Year 4.  The cost of
capital is 10%.

Calculate the NPV of the project.

 -$19636
 -$19363
 +$19636
 +$19363

Explanation
Year Cash Flow ($) Discount Factor @ 10% Present Value ($)
0 (28000) 1.000 (28000)
1 15000 0.909 13635
2 20000 0.826 16520
3 12000 0.751 9012
4 12000 0.683 8196
--------
NPV 19363
--------
Note that the resale value is included in the cash profit of the last year
because that is when it is received

Question 10 of 10
Summary

It’s lucky you’re good looking!

What is a plan that shows the expected cash inflows and cash outflows during the
budget period, including receipts from loans needed to maintain a minimum cash
balance and repayments of such loans called?

 An income statement.
 A statement of financial position.
 A cash budget.
 An operating budget.

The correct answer is

A cash budget.