Evaluate the Costs and Benefits of an AI-powered Business Solution AB-100 Practice Questions (Page 4)

Questions 16–20

1. 16expert · hard

   A company is evaluating an AI solution that will cost $150,000 to implement and $30,000 per year to maintain. The solution is expected to generate $80,000 in annual savings. The company uses a 5-year evaluation period. What is the net present value (NPV) of the solution if the discount rate is 10%? (Assume savings and maintenance costs occur at the end of each year.)

   • AApproximately $39,500
   • BApproximately $250,000
   • CApproximately $100,000
   • DApproximately -$10,000
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2. 17expert · hard

   A company is evaluating an AI solution for predictive maintenance. The solution is expected to reduce machine downtime by 20%, saving $200,000 per year. The solution will cost $150,000 to implement and $50,000 per year to operate. The company's cost of capital is 10%. What is the net present value (NPV) of the solution over a three-year period?

   • A$450,000
   • B$223,028
   • C$124,343
   • D$300,000
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4. 18application · medium

   A manufacturing company wants to add AI-powered predictive maintenance to its existing equipment monitoring system. The company has a small IT team with no data science expertise and a limited budget. The required AI capability is a standard anomaly detection model that is available as a pre-built service. Which approach is most appropriate?

   • APurchase a general-purpose AI platform and hire a team of data scientists to configure it
   • BBuild a custom anomaly detection model from scratch
   • CExtend the existing monitoring system by writing custom AI code internally
   • DBuy a pre-built AI service and integrate it with the existing monitoring system
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5. 19application · medium

   A company uses a model router to choose between two AI models for a document-summarization feature. The router currently routes based on the length of the document. The team finds that short documents sometimes contain complex legal language that the small model handles poorly. What is the best way to improve routing?

   • AUse only the small model to reduce costs
   • BRandomly assign documents to either model
   • CRoute all documents to the large model
   • DAdd a complexity score based on the presence of legal terminology
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6. 20expert · medium

   A company is evaluating an AI solution that will cost $80,000 to implement and $10,000 per year to maintain. The solution is expected to save $30,000 per year in labor costs. The company uses a 4-year evaluation period and a discount rate of 8%. What is the payback period of the solution?

   • A4 years
   • B2.67 years
   • C5 years
   • D3 years
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