Factors to Consider in Financial Decision Making

Running head: FINANCIAL DECISION MAKING
Financial Decision Making
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FINANCIAL DECISION MAKING
Discussion Forum 2:
Initial Post:
Hi All,
1. Qualitative and quantitative factors:
For any CEO before undertaking ultimate investment decision, a number of factors
including qualitative and quantitative have to be taken into consideration. In terms of
quantitative factors, direct material and direct labour costs are deemed to be most crucial.
Direct material costs would be incurred in the form of costs related to fuel and maintenance
of fleet, while direct labour costs would be incurred as additional staffs to be recruited for
managing customers. Another quantitative factor to be considered is interest expense that the
business has to incur on loan taken. On the other hand, the qualitative factors that have to be
taken into account constitute of morale of the employees receiving lower salaries in
MegaSaver, perceptions of the customers towards service quality offered and investors’
thinking pattern towards future investment.
2. Strategic management accounting:
For assisting in the accumulation and evaluation of quantitative as well as qualitative
data, the CEO has to depend on management information system that would fetch outcomes
for the purposes related to strategic management. As a result, it would provide benchmarks
based on which cost targets could be set and competitive pricing policies could be
implemented effectively (Kaplan and Atkinson, 2015).
3. Balanced scorecard:

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FINANCIAL DECISION MAKING
The primary reason of developing balanced scorecard has been to address the
loopholes in systems of performance management depending entirely on the metrics of
financial performance (Atrill and McLaney, 2015). The CEO of the organisation could
integrate the results of both qualitative and quantitative factors and thus, the benefits of
quantity could be weighed against those of quality. With the help of this approach, the CEO
could utilise four significant areas that comprise of financial, customer, learning and growth
and internal business process perspectives.
Regards
References:
Atrill, P. and McLaney, E., 2015. Management Accounting for Decision Makers (8th Edition).
Harlow: Pearson.
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.

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FINANCIAL DECISION MAKING
Response to Initial Post 1:
Hello Mohammed,
After going through your post, I could see that you have identified some extremely
crucial factors that the CEO of the airline has to take into account before making any
investment decision. Frills Airway would be considered as a useful service by the customers,
if they do not value the in-flight meals to be necessary. Hence, the introduction of this airway
would assist in maximising the satisfaction level of the customers. Another important point
you have mentioned is the low commission to the cabin crews, which would be detrimental to
the organisation during peak periods. However, I would like to mention that salary hike
should be limited to a particular extent, as too much increase in salary might minimise the
overall net income of the airline (Henderson et al. 2015).
The other significant aspects you have mentioned is that continuous increase in
variable costs might minimise revenue and hence, the project would be useless. In such
situation, I think that the airline has to look for the available suppliers and accordingly, they
could negotiate with them before making a final deal (Hoyle, Schaefer and Doupnik, 2015).
This would assist the airline in keeping the costs under control for the airline.
Regards
References:
Henderson, S., Peirson, G., Herbohn, K. and Howieson, B., 2015. Issues in financial
accounting. Pearson Higher Education AU.
Hoyle, J.B., Schaefer, T. and Doupnik, T., 2015. Advanced accounting. McGraw Hill.