The Term Net Present Value Means the Difference Between

question 44

Multiple Choice

The term net present value means the difference between:

• A)the total net income of the project and the initial investment.
• B)the initial investment and the residual value.
• C)the future value of the cash flows and the present value of the cash flows.
• D)the present value of the net cash inflows and the investment's cost.

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Definitions:

Push Model

A business model in which the production process begins with a forecast, which predicts the products that customers will want as well as the quantity of each product. The company then produces the amount of products in the forecast, typically by using mass production, and sells, or “pushes,” those products to consumers.

Make-to-stock

A production strategy where items are manufactured for stock based on demand forecasts, rather than made to order.

Production Process

A cross-functional business process in which a company produces physical goods.

Pull Model

A business model in which the production process begins with a customer order and companies make only what customers want, a process closely aligned with mass customization.