Buying an Input Is Most Sensible When There Is A(n)

question 89

Multiple Choice

Buying an input is most sensible when there is a(n) ________ potential for competitive advantage and a(n) ________ degree of strategic vulnerability.

• A) high; moderate
• B) intermediate; moderate
• C) high; low
• D) low; low

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Definitions:

Forecasted Cost

An estimate of the expenses that will be incurred on a project or by a company in a future period.

Average Cost

The total cost of goods available for sale divided by the total number of units available for sale, determining an inventory valuation.

Sensitivity

The degree to which the value of an investment or financial metric responds to changes in market conditions or other variables.

Net Present Value

A calculation used to determine the current value of a series of future cash flows by discounting them at a specific rate.