Advanced management accounting Assignment Example | Topics and Well Written Essays - 1000 words

Advanced management accounting - Assignment Example The net present value method is usually used to calculate the economic viability of a project and it is used to determine if the project is economically viable or it is not. The advantage of using the NPV criteria in the valuation of a project is the fact that the method has a clear decision making process. In evaluating a project or product, if the net present value is positive, then the project should be accepted by the management because the product or project would benefit the company (Cadenhead, 1970, 80).If the net present value is a negative, then the project or product should be rejected. If the net present value is equal t zero, then the management would be at a break even and any decision taken would not be harmful to the profitability of the company (Barton, 1999, 234). In case the management of Smart electronics decides to talk up the proposed investment, it would be costly for the company because the company would be running at a loss as a result of the many costs that a re associated with the product. The only thing that would warrant the acceptance of the product would be the reduction of costs to the company. The many costs that are associated with the product are making it hard for the company to gain any profits (Bastable, 1995, 133). C) Return on investment is a rate of return that accrues to shareholders of a company as a result of investing in the company. The rate of investment would be the main determinant for an investor before making any decision. The rate of return is however determined by the risk factor that is associated with a project or company. A company that has a high rate of risk is usually associated with high returns while companies that have low risk levels are associated with low returns. In the case of Smart electronics, the return on investment will be viewed on the rate of return that will accrue to the company as a result of investing in the new product. The investment in a new product should be feasible in the sense th at the returns should be positive and that the returns would be in such a manner as to work in the favor of the company in terms of profitability. Profitability of a company will increase if the company gets high returns from the products that it sells. For smart electronic to maximize on its rate of return, it should try to cut on costs that are associated with a product and the level of efficiency should be improved so as to ensure that running costs are as low as possible. The level of efficiency is usually determined by the machinery that is in the company. That should be done in a manner that the process of a company are efficient and the people working in the various departments are also efficient enough. Efficiency of processes is done by the company improving on the machinery that is been used in a company and the company improving the level of technology that is required to make the production process easier and simpler (Anthony, 1997, 225). The efficiency can

Business Decision Making Coursework Example | Topics and Well Written Essays - 1500 words

Business Decision Making - Coursework Example Decisions range from smaller and simple ones to complex ones which require great effort to facilitate the arrival to a reliable conclusion. The overall process of decision making needs to be executed in a logical and systematic manner that will allow the evaluation of all relevant elements before adopting one of the available alternative courses of actions. Therefore, decision making has to be carried out with an organized approach that will facilitate the consideration of all factors. This is according to Baker (2010). Williams (2007) agrees that academic experts in the business sector have devised models that can be employed when developing a decision. These models advocates for the adoption of various requisite steps in building the decision. The essential steps applied in making decisions at all contexts starts from then definition of a problem, identification of the alternative, evaluation of the available options, selecting the best alternative, appraising the feasibility of th e decision and presenting the proposed decision for approval by the relevant authorities. All major decisions are carried out systematically using these steps without omitting even one. In the business context, once the underlying problem has been defined rationally, the next step will entail the identification of the available solutions. The first two steps of decision making require the application of information concerning the problem situation. The third step on evaluation of the options also needs the appraisal of the situation’s information. At this juncture, one should be in a position to interpret the collected information appropriately using a suitable interpretation technique. Upon interpreting, the decision maker will pick the best alternative course of action, based on the validity of the findings depicted by the interpretation. This is according to Williams (2007). Baker (2010) asserts that information on a situation needs to be acquired before initiating a decis ion making process. The data collected from the sources will supplement the values needed to develop a body of information concerning a situation. At this juncture, it is logical to state that the practical part of a decision making process begins from the collection data on the concept under consideration. Data collection can be carried out using the suitable methods. The data can be obtained from either the primary or the secondary sources. Primary sources data collection entails the process of obtaining information from first hand respondents especially in the field by exercises like surveys and administration of questioners. In our discussion, the decision making process concerning Exchange Partnership Team (EPT) will start from the development of an outline illustrating the data collection exercise. Question 1 In the context of the West London Exchange company, the Exchange Partnership Team (EPT), data can be obtained with respect to the outline below; 1) Primary Data sources a ) Administering Questionnaires b) Observations c) Case studies d) Portfolios e) Interviews f) Evaluation of critical incidences 2) Secondary Sources a) Internet Databases b) Internal business records c) Government agencies records d) Business directories Question 2 Questionnaire According to Baker (2010), the most appropriate research methodology