Business Decision Making

BUSINESS
DECISION MAKING

TABLE OF CONTENTS
INTRODUTION .............................................................................................................................3
TASK ..............................................................................................................................................3
Business Decision Making...........................................................................................................3
Financial and Non financial factors influencing business decisions...........................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUTION
Business decision making have critical role to be performed by the managers and senior
executives. An organisation is required to have number of decisions on regular basis that define
the growth and direction of business. Executives and managers have to analyse the impact of
every decision that will be taken for the company with the use of different methods. Report will
reveal about the A&B plc which is proposing to make investments for restaurant and wants to
assess whether to invest in the dishwasher or in software project based on profitability.
TASK
Business Decision Making
Decision making refers to the process which includes identification of goals, having
relevant and the necessary information and to weigh alternatives to make sound decisions for the
entity. For success of the business, decision making could be said as most significant factor.
sound business decisions are based on the foundation of knowledge and experiences that leads
organisation to long term growth and prosperity. If business decisions are made over flawed or
incomplete information it could affect the over all operation of company significantly. It is
complex process for the managers to make decisions for the organisation that are most beneficial
from the various alternatives available to them (Kimmel, Weygandt and Kieso, 2018). Growth
and success of every company is dependent over quality of the decisions taken by management
and executives of the business. managers have to be updated about the recent trends, market
conditions and economic scenarios along with internal strengths and weaknesses of the
organisation.
Investment Appraisal Techniques
Companies are required to make number of financial decisions for increasing the capacity
or for expansion and growth of the organisation. The investment appraisals involved assessing
the viability of the different investments that company proposes to make for the business. They
enable company to identify profitability, returns on investments and time it will take to cover
costs. The techniques used in investment appraisals are mentioned below
Net Present Value
NPV is the most commonly used investment appraisal techniques by the management and
investors. NPV of projects are calculated by discounting the cash flows that will be generated
from project using the cost of capital rate and deducting it from initial costs of projects. If the
outcome is positive project is considered profitable.
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