A Vendor May Be Audited Both Before and During the Execution

question 30

Multiple Choice

A vendor may be audited both before and during the execution of a contract. During such a vendor audit, the focus may be directed at the management and resource management of the company. Which of the following areas would be EXCLUDED during such an audit?

• A) Use and planning of time, manpower and training.
• B) Defined quality responsibilities.
• C) Company philosophy and organizational charts.
• D) Design and process capabilities.

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Definitions:

Profitability Index (PI)

The profitability index is a calculation used to assess the relative profitability of an investment, based on its present value of future cash flows per unit of investment.

Profitability Index (PI)

A calculation that relates the benefits of an investment project to its costs, often used to compare the attractiveness of different projects.

Discount Rate

The rate at which an individual discounts future cash flows to determine their present value, essential in capital budgeting to assess the profitability of investments.

Capital Budgeting

The procedure a company follows to assess possible significant projects or investments.