Which of the Following Approaches Is a Good Way to Proceed

question 30

Multiple Choice

Which of the following approaches is a good way to proceed with the influence diagram building for a problem?

• A)The influence diagram for the entire problem is build first and then separate portions are clustered to form separate models.
• B)The influence diagram for all the model parts at the same level are built in parallel to reduce the likelihood of error.
• C)The influence diagram is reverse engineered -the diagram is developed in the opposite direction starting with the model output.
• D)The influence diagram for a portion of the problem is built first and then expanded until the total problem is conceptually modeled.

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Definitions:

Static Model

A fixed scenario analysis tool that assumes no change in variables over time when evaluating economic conditions or investment outcomes.

Depreciation Write-Off

The accounting process of allocating the cost of tangible assets over their useful lives to account for declines in value.

Weighted Average Cost

A calculation that takes into account the varying costs and quantities of resources or components, producing a composite average cost.

Earnings Before Interest

Earnings before interest is a measure of a company's profitability that calculates earnings before the expense of interest is deducted; it’s part of the calculation used for EBIT (earnings before interest and taxes).