If a vendor's software solution is less expensive but includes a higher ongoing support cost, what analysis is needed to determine the breakeven point?

The correct choice highlights the importance of cost-effectiveness analysis in determining the breakeven point when comparing vendor solutions with differing costs. This analysis focuses specifically on assessing the total costs involved over time, including both the initial purchase price and the ongoing support costs.

In this scenario, while the initial expense for the vendor's software solution may be lower, the higher ongoing support costs could significantly affect the overall financial feasibility of the solution over its lifespan. A cost-effectiveness analysis allows for a comprehensive understanding of these cumulative costs, enabling stakeholders to evaluate how long it will take for the initial cost savings to be offset by the additional expenses.

This type of analysis is particularly useful for decision-making when options present a trade-off between different types of costs, allowing businesses to ascertain the point at which one option becomes more or less favorable financially compared to another.