Product Value Analysis (PVA) Is an Approach to Cost Reduction

question 5

True/False

Product value analysis (PVA) is an approach to cost reduction in which components are studied to determine if they can be redesigned or standardized or made by cheaper methods of production.

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Definitions:

Debt/Equity Ratio

A gauge for comparing the mix of a company's funding through shareholders' equity versus debt, frequently applied to understand the company's use of financial leverage.

Retained Earnings

Retained earnings represent the portion of net income left after dividends have been paid to shareholders, which is then reinvested in the business.

Static Theory

A concept in economic theory that assumes conditions remain constant over time.

Capital Structure

The mix of debt and equity financing that a company uses to fund its operations and growth.