The Easier It Is to Maintain a Working Product or Fix

question 94

Multiple Choice

The easier it is to maintain a working product or fix a broken product, the more _____ that product is.

• A) reliable
• B) serviceable
• C) tangible
• D) durable

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Definitions:

Required Rate of Return

Rephrased: The minimum percentage of profit or interest an investor expects from an investment to consider it worthwhile, factoring in the risk involved.

NPV

Net Present Value represents the discrepancy between the current value of cash inflows and outflows throughout a specific timeframe, utilized in capital budgeting to evaluate an investment's profitability.

PI

Profitability Index (PI) is a ratio that calculates the relationship between the benefits of a project or investment and its costs, helping to determine its attractiveness.

IRR

Internal Rate of Return, a financial metric used to estimate the profitability of potential investments, calculating the interest rate at which the net present value of all cash flows (both positive and negative) from a project or investment equals zero.