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Fundamentals of Financial Management
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Chapter 15 / Exercise 15-11
Fundamentals of Financial Management
Brigham
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1. Four categories of managerial tasks 1. Planning —formally defined decision making is to choose the best option among the alternative options that are available to you. 2. Decision Making —Planning activities involve developing a detailed set of operational and often financial descriptions of what needs to be done in the future. 3. Directing —Day to Day activities. 4. Controlling —Managers have goals and want to achieve them through use of human and physical resources. If the organization is not moving in right direction they have to take corrective action. 2. The four step framework for decision making 1. Specify —the decision problem, and decision makers goals 2. Identify —look at options 3. Measure Benefits —advantages and disadvantages (cost) to determine the value which is the benefits reaped less cost incurred for each option. 4. Make Decision —making a decision from the options with highest value. That is, the primary role of accounting is to help measure the costs and benefits of decision options. 3. How to identify decision options
4. How to measure benefits of decision options.
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Fundamentals of Financial Management
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Chapter 15 / Exercise 15-11
Fundamentals of Financial Management
Brigham
Expert Verified

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