What is an extent decision?
An extent decision requires the manager not only to choose whether or not to do something, but also to decide the extent of that activity. Examples are how many units of product to produce, what to spend on advertising, and how many employees to hire.
What appears to be relevant in an extent decision?
The relevant costs and benefits of an extent decision are marginal costs and marginal revenue. If the marginal revenue of an activity is larger than the marginal cost, then do more of it. An incentive compensation scheme that increases marginal revenue or reduces marginal cost will increase effort.
Is investment an extent decision?
Investment decisions are a type of extent decisions but look into the future. All investments represent a trade off between possible future gain and current sacrifice. Make decisions that have a time dimension through backward induction. the investment decision is beneficial to the business.
What do you understand by investment decision?
An investment decision is a well-planned action that allocates financial resources to obtain the highest possible return. The decision is made based on investment objectives, risk appetites, and the nature of the investor, i.e., whether they are an individual or a firm.
Which of the following is not a relevant cost in decision-making?
Sunk costs 1. Sunk costs (past costs) or committed costs are not relevant. Sunk, or past, costs are monies already spent or money that is already contracted to be spent. A decision on whether or not a new endeavour is started will have no effect on this cash flow, so sunk costs cannot be relevant.
Which of the following are relevant in short term decision-making?
Which of the following are relevant in short-term decision making? Purchase price, reduction in variable costs, additional revenue and opportunity costs are relevant in short-term decision making.
What are examples of investment decisions?
An example of a long term capital decision would be to buy machinery for production. This is important as it affects the long term earnings of the firm. Short term investment is related to levels of cash, inventories, etc. These decisions affect day to day working of the business.
Which decision is an investment decision?
An investment decision is a well-planned action that allocates financial resources to obtain the highest possible return. The decision is made based on investment objectives, risk appetites, and the nature of the investor, i.e., whether they are an individual or a firm.
Which of the following is an example of investment decision?
An example of a long term capital decision would be to buy machinery for production. This is important as it affects the long term earnings of the firm. Short term investment is related to levels of cash, inventories, etc. These decisions affect day to day working of the business.
What is financing decision give an example?
A firm has to decide the method of funding by assessing its financial situation and the characteristics of the source of finance. For example, interest on borrowed funds have to be paid whether or not a firm has made a profit. Likewise, borrowed funds have to be repaid at a fixed time.
Which of the following is not true related to sell or process further decisions?
The correct option is: c) Fixed costs Explanation: Fixed cost is considered a cost that cannot be processed for further decisions as it stays the…
Which of the following is not related to decision-making?
Answer. Answer: Rationality and partiality/biasness are not included in the process of decision-making.
Which of the following are relevant in short-term decision-making quizlet?
Which of the following are relevant in short-term decision making? Purchase price, reduction in variable costs, additional revenue and opportunity costs are relevant in short-term decision making.
What is a short-term decision?
Short‑term decisions focus on how to make the best use of resources in the short‑term. The relevant costing approach is therefore essential if a business is to maximise profits. In the long‑term, however, it should be remembered that a business must cover all of its costs, including its fixed costs.
What are investing decisions and financing decisions?
Financing Decisions includes an Inflow of cash. Investment Decisions include outflow of cash. In financing decisions, How much debt and equity sell, When to pay a dividend. capital decisions: related to buying the inventory (Stock), expenses for day-to-day activities.
What are investment decisions examples?
An example of a long term capital decision would be to buy machinery for production. This is important as it affects the long term earnings of the firm. Short term investment is related to levels of cash, inventories, etc. These decisions affect day to day working of the business.
What is an example of a financial decision?
A firm has to decide the method of funding by assessing its financial situation and the characteristics of the source of finance. For example, interest on borrowed funds have to be paid whether or not a firm has made a profit. Likewise, borrowed funds have to be repaid at a fixed time.
What are the 3 types of financial management decisions?
There are three decisions that financial managers have to take:
- Investment Decision.
- Financing Decision and.
- Dividend Decision.
Which of the following is not a type of decision?
c) concept evaluation is not a type of decision usually made during the product development stage.
What are the 4 financial decisions?
Types of Financial Decisions – 4 Types: Financing Decision, Investment Decision, Dividend Decision and Working Capital Decisions. The key aspects of financial decision-making relate to financing, investment, dividends and working capital management.
What are the 3 financial decisions?
There are three decisions that financial managers have to take:
- Investment Decision.
- Financing Decision and.
- Dividend Decision.
What is sell or process further decision?
The sell or process further decision is the choice of selling a product now or processing it further to earn additional revenue. This choice is based on an incremental analysis of whether the additional revenues to be gained will exceed the additional costs to be incurred as part of the additional processing work.
Which of the following is the decision rule of a sell or process further decision?
The decision rule in a sell-or-process-further decision is: process further as long as the incremental revenue from processing exceeds: fixed processing costs.
Which of following is not a decision making statement in Python?
Which one of the following is not a decision making statement? Explanation: While is an iteration statement.
Which of the following is not the type of decision Mcq?
c) concept evaluation is not a type of decision usually made during the product development stage.
Which of the following are relevant in short-term decision-making?
Which of the following are relevant in short-term decision making? Purchase price, reduction in variable costs, additional revenue and opportunity costs are relevant in short-term decision making.
Which one of the following costs is generally not relevant to the decision quizlet?
Terms in this set (50) A cost that can be avoided by choosing one alternative over another is relevant for decision purposes. Sunk costs are never relevant in decision making.
What is medium term decision?
Though the term does not necessarily denote a specific length of time, many consider anything below two years to be short-term; from two to ten years as medium term; and anything beyond 10 years to be long term.
What are the 4 steps in a short-term decision process?
These are as follows: 1 Becoming aware that a decision needs to be made 2 Identifying the available alternatives 3 Evaluating the alternatives 4 Making the decision.
What is an investment decision an example?
An example of a long term capital decision would be to buy machinery for production. This is important as it affects the long term earnings of the firm. Short term investment is related to levels of cash, inventories, etc. These decisions affect day to day working of the business.