Costs Incurred in Detecting Which of the Individual Units Do

question 225

Multiple Choice

Costs incurred in detecting which of the individual units do not conform to specifications are called

• A)correction costs.
• B)external failure costs.
• C)internal failure costs.
• D)prevention costs.
• E)appraisal costs.

---

Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating its liquidity and operational efficiency.

Discount Factor

A multiplier used in discounted cash flow (DCF) analysis to calculate the present value of future cash flows, accounting for time value of money.

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered in depreciation calculations.

Cash Operating Costs

The expenses directly associated with the day-to-day operations of a business, excluding non-cash items like depreciation.