Management Information System (MIS) Practice Exam

Which statement is true regarding an extranet?

1. It restricts the company's information from going "on the web."

2. It enables two or more firms to use the internet to do business together.

3. It can be accessed only by employees within an organization.

4. It requires large expenditures to train users on the technologies.

The correct answer is: It enables two or more firms to use the internet to do business together.

The statement that an extranet enables two or more firms to use the internet to do business together is accurate and highlights the core purpose of an extranet. An extranet serves as a private network that leverages internet technology to allow controlled access between different organizations. This access facilitates communication, collaboration, and information sharing among businesses, suppliers, partners, and customers, thus enhancing business relationships and operational efficiency. In contrast, the other statements do not accurately describe the nature of an extranet. The first option suggests that an extranet restricts information from being shared on the web, which is not true since an extranet facilitates information exchange specifically through internet connections. The third option posits that access to an extranet is limited to employees within a single organization, which contradicts the fundamental concept of an extranet that is designed for cross-organizational communication. The last option implies that using an extranet requires significant user training expenditures, which can vary based on the complexity of the technology but is not inherently a characteristic of extranets themselves. These factors together affirm that option B correctly characterizes the fundamental function of an extranet.