Which of the Following Isnot a Reason for Variability

question 41

Multiple Choice

Which of the following isnot a reason for variability?

• A) Employees, machines, and suppliers produce units late.
• B) Customer demand is unknown.
• C) Employees, machines, and suppliers produce units that conform to standards.
• D) Engineering drawings are inaccurate.
• E) Drawings or specifications are incomplete.

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Definitions:

Net Present Value

A calculation that compares the present value of cash inflows to the present value of cash outflows over a period of time, used to assess the profitability of an investment.

Payback Period Method

A simple calculation that divides the initial investment by the annual cash inflows to determine how long it will take to recoup the initial investment.

Capital Budgeting

The process of planning and managing a firm's long-term investments in projects and assets.

Net Present Value

The calculation used to find today's value of a future stream of payments and receipts by discounting them at a specific rate, often used in capital budgeting to assess the profitability of an investment.