QUALITY MANAGEMENT PRINCIPLES Flashcards
1
Q
Quality Management Principles
A
- Customer focus
- Leadership
- Engagement of people
- Process approach
- improvement
- Evidence based decision making
- Relationship Management
2
Q
Project Selection Process
A
Financial and Non financial Selection
3
Q
Financial Measures
A
- Payback Period
- Net Present Value
- Profitability Index
4
Q
Payback Period Process
A
ROI = INITIAL INVESTMENT / PERIODIC CASH FLOW
5
Q
Net Present Value Process
A
Cash flow present value = summation from i=0 to T (cash flow/(1+r) raised to i)
t = total time period i = period r = rate of return
6
Q
IF NPV > 0, IS IT PROFITABLE?
A
YES
7
Q
Profitability Index process
A
PI = Cash flow present value / initial investment
8
Q
if PI > 1, what does it imply?
A
it is a profitable project
9
Q
What is cashflow present value?
A
present worth of annuities
10
Q
What is annuity?
A
Cash flow periodically
11
Q
NPV formula
A
NPV = -initial investment + cashflow present value
