Value Analysis Is ______

question 69

Multiple Choice

Value analysis is ______.

• A)used to improve,at a minimum cost,the functionality of a product without affecting its existing functions and standards
• B)used to completely analyze and improve the value of all of the components used to develop a product from its design to its final delivery
• C)used to design a product with a view to meet the requirements for a new market
• D)used to analyze the process by which market requirements may be satisfied

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Definitions:

Traditional NPV

Net Present Value; a method of evaluating the profitability of an investment by calculating the present value of expected future cash flows minus the initial investment cost.

Beta

A measurement of the volatility of a stock or a portfolio in comparison to the market as a whole.

Discount Rate

The rate employed in discounted cash flow assessments to establish the current valuation of anticipated future cash flows.

Certainty Equivalent Approach

A method used in capital budgeting and investment theory that adjusts future cash flows to account for risk, making them equivalent in value to certain cash flows.