The Following Are Shortcomings Associated with Analyzing Problems "One Factor

question 43

Multiple Choice

The following are shortcomings associated with analyzing problems "one factor at a time" (also known as OFAT and 1FAT) except:

• A)In real life it is almost impossible to hold all other factors constant
• B)Experimental designs specify levels for each factor to be included
• C)It is very hard to account for interactions or joint variation between factors
• D)Though graphing results is helpful to observe different factors,it is hard to graph variation of more than two or three variables at the time

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Definitions:

NPV

Net Present Value (NPV) is the calculation used to find today’s value of a future stream of payments, subtracting the initial investment.

Cash Flow

The complete financial movement into and out of a corporation, especially regarding its liquidity.

Equivalent Annual Annuity

A calculation used to compare the returns of investments with different payment schedules by converting them into an equivalent sum received at regular annual intervals.

Cost Of Capital

The minimum rate of return that a business must earn before generating value, representing the opportunity cost of investing resources in a specific company instead of elsewhere.