Improving Quality Seems to Be a Strategic Weapon in Gaining

question 102

Multiple Choice

Improving quality seems to be a strategic weapon in gaining market share.However,improving quality entails allocation of resources and effort.Which one of the following costs increases to improve quality?

• A) prevention costs
• B) appraisal costs
• C) internal failure costs
• D) external failure costs

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Definitions:

Profitability Index

A calculation used to assess the desirability of an investment, based on its present value of future cash flows relative to its initial cost.

NPV Profile

A graph that depicts the relationship between a project's net present value (NPV) and various discount rates, helping to assess the project's risk and potential profitability.

Horizontal Axis

The x-axis in a graph or chart, representing a dependent variable in data comparison exercises.

Internal Rate

The Internal Rate of Return (IRR), a measure used to evaluate the profitability of potential investments.