A Pareto Chart Is Useful Because It Is Based on the Theory

question 64

Short Answer

A Pareto chart is useful because it is based on the theory that 80% of the observations are accounted for by 20% of the ________.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and outflows over a period, used in capital budgeting to assess profitability of investments.

Working Capital

The difference between a company's current assets and its current liabilities.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, where the asset's cost is evenly spread over its useful life.

Net Present Value

A financial analysis method used to determine the value of an investment by calculating the present value of its future cash flows.