The Process Where a Firm Contracts Out a Business Process

question 16

Multiple Choice

The process where a firm contracts out a business process or activity to an external supplier is known as _________.

• A)outsourcing
• B)vertical integration
• C)horizontal diversification
• D)market penetration

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Definitions:

Initial Costs

The initial expenses incurred during the setup or early stages of a project, including but not limited to setup, installation, and purchase costs.

MIRR

Modified Internal Rate of Return, a measure used to assess the profitability of an investment, accounting for the cost of capital and reinvestment of cash flows.

Terminal Value

The estimated value of a business or project at the end of a forecast period, often used in discounted cash flow analyses.

Non-normal Cash Flows

Cash flow patterns that do not match standard inflow and outflow models, often irregular in amount and timing.