The First Step in the Factor Rating Method for Evaluating

question 14

Multiple Choice

The first step in the factor rating method for evaluating location alternatives is what?

• A) select a scale by which to evaluate each alternative relative to each factor
• B) evaluate each alternative relative to each factor
• C) select the alternative with the highest score
• D) identify dominant factors
• E) assign weights to factors reflecting the importance of each factor relative to the other factors

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Definitions:

Nominal Annual Rate

The stated or face interest rate of a financial product, not adjusting for compounding or inflation over time.

Effective Annual Rate

This is the interest rate on an investment or loan that accounts for the effects of compounding over a given period, providing a more accurate picture of financial returns or costs.

Monthly Compounding

The process of calculating interest earnings on the principal and previously earned interest every month.

Nominal Annual Interest Rate

The stated interest rate of a bond or loan, not adjusted for inflation, which indicates the periodic interest payment.