​Which of the Following Is True of a Value Stream

question 58

Multiple Choice

​Which of the following is true of a value stream?

• A) ​A value stream reflects all that is done to bring the product to a customer.
• B) ​A value stream includes only value-added activities.
• C) ​A value stream reflects only the nonvalue-added activities.
• D) A value stream is never created for groups of products that use common processes.

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Definitions:

Net Present Value

A valuation method that calculates the worth of a future stream of cash flows by discounting them back to their present value.

IRR

Internal Rate of Return; a financial metric used to estimate the profitability of potential investments, calculating an annual growth rate.

Profitability Index

A fiscal indicator that evaluates an investment's comparative profitability by calculating the ratio of the present value of future cash inflows to the upfront cost of the investment.

Present Value

The immediate worth of a future financial amount or sequences of cash flows, using a specified rate of return for calculation.