Unit 4 - Decision Making

Question 1

What are some examples of a strategic decisions?

Answer 1

Opening a new store, making a new product, changing production methods or selling in a different market

Question 2

What are examples of financial information?

Answer 2

Budgets, Existing Financial performance and position, Cost-volume-profit analysis, capital expenditure requirements of the new project

Question 3

What are examples of non-financial information?

Answer 3

competition in the market, age and state of repair of existing machinery and equipment, location of existing stores, existing relevant range, skills of existing staff, legal requirements of new market/product/service,environmental considerations, market research into what customers demand

Question 4

What makes information financial information?

Answer 4

It must have a dollar amount or number of units/hours attached to it

Question 5

Is a lower or higher break even better?

Answer 5

Lower

Question 6

Is a higher or lower contribution margin better?

Answer 6

Higher

Question 7

Is it better for higher or lower profit?

Answer 7

Higher

Question 8

When comparing two options should you consider the cash surplus or deficit each option will create?

Answer 8

Yes, this is an important factor in which option to choose