BUS 322 Lecture Notes - Lecture 8: Decision Rule, United States Treasury Security, Discounted Cash Flow

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 322
• Professor: Mahmoudian Fereshteh

Document Summary

Strategic moves: decision making requires benefit cost analysis. Example: co(cid:374)side(cid:396) the follo(cid:449)i(cid:374)g data o(cid:374) last (cid:455)ea(cid:396)"s a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g ope(cid:396)atio(cid:374)s that (cid:449)e(cid:396)e o(cid:271)tai(cid:374)ed (cid:271)(cid:455) clea(cid:396) ai(cid:396) Systems, inc. (cas), from an industry trade association that gathers and reports data from all members of the association anonymously. I(cid:374) e(cid:448)e(cid:396)(cid:455) (cid:272)ase, the asso(cid:272)iatio(cid:374) a(cid:448)e(cid:396)age (cid:272)ost pe(cid:396) t(cid:396)a(cid:374)sa(cid:272)tio(cid:374) (cid:449)as less tha(cid:374) cas"s (cid:272)ost. Cost saving=cas cost per transaction association cost per transaction. Cost saving per year=cas cost per transaction number of transactions: security detection devices corporation (sddc) is a comparably sized competitor of cas and has the same number of accounting transactions per year as cas. Sddc, however, processes each accounting transaction for 20% less than the association average. The management of matrix, inc. is in the process of accessing the probability of market growth for their product. If the e(cid:454)pe(cid:272)ted (cid:373)a(cid:396)ket g(cid:396)o(cid:449)th of 4. 6% is (cid:272)(cid:396)iti(cid:272)al assu(cid:373)ptio(cid:374) o(cid:396) pa(cid:396)a(cid:373)ete(cid:396) of a (cid:272)o(cid:373)pa(cid:374)(cid:455)"s e(cid:454)pa(cid:374)sio(cid:374) decision.