In Portfolio Analysis,the Goal When Purchasing Noncritical or Routine Spend

question 3

Multiple Choice

In portfolio analysis,the goal when purchasing noncritical or routine spend is to:

• A)assure quality at expected levels.
• B)minimize price per unit.
• C)minimize acquisition time and cost.
• D)reduce or eliminate customization.
• E)assure continuous supply at lowest total cost of ownership.

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Definitions:

Perpetual Cash Flows

Cash flows that are expected to continue indefinitely without an end.

D/E Ratio

Debt-to-Equity Ratio, a measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity.

Equity Costs

The cost of obtaining capital through the sale of shares in the company, including dividends payouts and the dilution of share value.

Debt Costs

The total expenses involved in borrowing money, including interest payments and fees.