Which of the Following Is a Qualitative Factor That Should

question 38

Multiple Choice

Which of the following is a qualitative factor that should be considered when evaluating a make-or-buy decision?

• A)the quality of the outside supplier's product
• B)whether the outside supplier can provide the needed quantities
• C)whether the outside supplier can provide the product WHEN it is needed
• D)all of the above

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Definitions:

IRR

The interest rate at which the total present value of a project or investment's incoming and outgoing cash flows sum to zero.

WACC

A technique called Weighted Average Cost of Capital computes a firm’s cost of funds, taking into account the proportional weighting of various capital types.

NPV

Net Present Value represents a technique for assessing the profitability of a project or investment, utilized in the process of capital budgeting.

Cash Flow

The total amount of money being transferred into and out of a business, capturing the company's operational, investing, and financing activities.