ACC 117 Lecture Notes - Lecture 1: Entscheidungsproblem, Financial Accounting, Opportunity Cost
Document Summary
Decision choosing of one option from a set of options to achieve a goal. Specify the decision problem, including the decision maker"s goals. When deciding goals individuals differ in what they classify as important. Determine the value (benefits reaped, costs incurred) of each option. Measuring benefits (advantages) and costs (disadvantages) to. Every option has a unique trade-off of benefits and costs. Opportunity cost is the value of the next best option forgone. Make the decision; choosing the option with the highest value. Value must exceed opportunity cost beneficial mission. Organization is a group of individuals engaged in a collectively. Organizations have more focused goals that an individual; usually profit. Goals of a publically traded company is to maximize shareholder"s value (maximize the returns to shareholders who invest in the firm) Policies and procedures to define acceptable behaviour. Monitoring to make sure policies and procedures are followed. Incentive schemes and performance reviews to motivate employees.
