What Type of Cost Is Downtime Attributed to Quality Problems

question 38

Multiple Choice

What type of cost is downtime attributed to quality problems?

• A)external failure cost
• B)internal failure cost
• C)appraisal cost
• D)prevention cost

---

Definitions:

Levered Firm

A company that employs debt in its capital structure, as opposed to an unlevered firm which is financed only through equity.

Annual Coupon

The fixed interest payment a bondholder receives from the bond's issuer each year.

Perpetual Debt

Debt instruments with no maturity date, allowing issuers to pay interest indefinitely without repaying the principal.

Coupon Rate

The yearly interest rate paid on a bond, shown as a percentage of its nominal value.