Value Analysis

question 7

Multiple Choice

Value analysis:

• A)Improves the usefulness of the product without increasing the cost
• B)Reduces the cost without reducing the usefulness of the product
• C)Both a and b
• D)None of the above

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Definitions:

Effective Rate

The actual interest rate of an investment or loan, taking into account the effect of compounding interest as opposed to the nominal or stated rate.

Annuity

A monetary product designed to deliver regular payouts, mainly aimed at funding retirees' income needs.

Compounded Monthly

A compound interest calculation method where interest is added to the principal balance each month.

RRSP

Registered Retirement Savings Plan, a Canadian financial vehicle for individuals to save for retirement on a tax-sheltered basis.