External Failure Costs Include

question 113

Multiple Choice

External failure costs include

• A) Scrap
• B) Litigation costs resulting from product liability issues
• C) Rework
• D) Quality inspections
• E) Employee training

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Definitions:

Present Discounted Value

The present value of a future amount of money or sequence of cash inflows, calculated using a designated rate of return.

Formula

A mathematical relationship or rule expressed in symbols.

Present Value

The present worth of a sum of money or series of cash flows expected in the future, calculated using a particular rate of return.

Interest Rate

The percentage of a sum of money charged for its use, indicating the cost of borrowing money or the return on invested savings.