What Is the First Step in Conducting Value Engineering/value Analysis

question 8

Multiple Choice

What is the first step in conducting value engineering/value analysis?

• A)Estimate the value of each function in a product.
• B)Identify the functional purposes of a product.
• C)Compare the importance and cost of each function.
• D)Ask suppliers to provide cost information.

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Definitions:

Profitability Index

A financial tool used to measure the relative profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Working Capital Investment

The funds invested in the short-term assets of a company, such as inventory and receivables, to support its daily operations.

Salvage Value

The estimated residual value of an asset at the end of its useful life, important for calculating depreciation.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or to evaluate the attractiveness of an investment.