What Type of Major Cost Category Is Considered in the Cost

question 51

Multiple Choice

What type of major cost category is considered in the cost associated with placing and receiving the order?

• A) Turnover Cost
• B) Supplier-Development Cost
• C) Transaction Cost
• D) Pre-transaction Cost

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Definitions:

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, considering inflation and returns, used to evaluate investments.

IRR

Internal Rate of Return; a financial metric used to gauge the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Cost of Capital

The rate of return a company must earn on its investment projects to maintain its market value and attract funds.

Profit Margin

A financial measurement that calculates the percentage of profit a company makes from its total revenue.