If the Natural Variation of the Process Is Greater Than

question 39

Multiple Choice

If the natural variation of the process is greater than the specification range, which of the following is true?

• A) The process can be termed 'capable'.
• B) The process can be termed 'not capable'.
• C) The process can be termed 'controlled'.
• D) The process can be termed 'deviant'.

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Definitions:

NPV

Net Present Value, a method used in capital budgeting to assess the profitability of an investment or project by calculating the present value of expected future cash flows minus initial costs.

Replacement Chain Approach

The Replacement Chain Approach is a method used in capital budgeting to compare projects of unequal lifespans by replicating them until they reach a common end point, facilitating fair comparison.

Cost of Capital

The rate of return that a business needs to generate in order to cover the cost of generating new capital, which can include debt and equity.

NPV

Net Present Value (NPV) is the calculation used to find the present value of cash flows at a specific discount rate, often used to assess the profitability of an investment.