Financial Decisions

4 Key excerpts on "Financial Decisions"

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  eBook - ePub

  Start-Up Guide for the Technopreneur

  Financial Planning, Decision Making, and Negotiating from Incubation to Exit

  • David Shelters(Author)
  • 2012(Publication Date)
  • Wiley

    (Publisher)

  To examine the various critical elements related to establishing effective decision-making processes and structures, the chapter begins with a discussion of financial decision-making processes, which include employing sound corporate governance practices, managing financial expectations, and understanding the dynamics of your decision-making regime. The next topic is establishing financial decision-making structures. After articulating the objectives to be pursued, we examine the means to establish the appropriate decision-making bodies and procedures, the proper allocation of decision-making authority and responsibilities, and the placement of individual decision makers in the most appropriate decision-making bodies. The chapter concludes with a thorough investigation of financial decision making in practice. The areas covered include strategic financial planning/fundraising, budgeting, operational (day-to-day) Financial Decisions, financial dealings with external parties, and exiting.

  Financial Decision-Making Process

  Managing the financial decision-making process provides an opportunity to preserve a certain level of control, maintain the focus of the company, and ensure efficient decision making. It serves as a base for establishing the most effective decision-making structures.

  Practicing Sound Corporate Governance

  As we discussed in Chapter 7 , instituting a strong corporate governance regime is both an acknowledgment that management (i.e., the decision makers) have been granted decision-making authority by the owners (i.e., shareholders) and that such authority is to be wielded in the interest of the owners. The corporate governance structures and practices you have instituted will have a significant effect on both the decision-making structures you elect to establish and the financial decision-making procedures conducted in all decision areas.

  A responsible board serves as a check on the decisions and actions of management, particularly in regard to strategic-level decisions that require some form of board consent. The board sets the strategic objectives of the company, sparing management from involvement in stakeholder politics and permitting apolitical decision making necessary for honoring the performance imperative. The board also is required to grant sufficient authority to each decision-making body to enable decisions to be made and executed effectively.

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  eBook - PDF

  Introduction to Financial Management

  • Sudanshu Pandeya(Author)
  • 2023(Publication Date)
  • Society Publishing

    (Publisher)

  Figure 5.1. Financial judgments. Source: https://qsstudy.com/investment-decision-financial-management/. In decision-making process, neuroeconomics has also investigated the presence of financial risks, including their role within decision-making processes. Their findings have contributed proof to the body of financial literature regarding the open-to-interpretation assessment of risk within decision-making processes (Demin et al., 2018; Rustichini et al., 2005). 5.2. INVESTMENT AND DECISIONS IN FINANCE Investment decisions are based completely on the investor’s subjective risk assessment, understanding of improved procedures, and anticipated expenses. To determine if they will make the capital spending or not, businessmen Investment and Decision-Making in Financial Management 159 would like to understand the off period (Harcourt et al., 1967). Investors must fully and accurately comprehend all of the potential prospects before making any investment choices, and hasty judgments should be avoided. A poor investment choice may even cause a company to go bankrupt. To get the most out of the assessment process, it is essential to comprehend the fundamental concepts behind investment choices. Indicators regarding investment appraisal must be selected based on the specifics of the program and the decision knowledge (Figure 5.2) (Rick and Loewenstein, 2008; Avram et al., 2009). Figure 5.2. Investing choices. Source: https://in.pinterest.com/pin/investment-decisions- ppt--420945896426540491/. Investing is the deployment of resources to recover the expenses and generate a large return over the mid to long term. Materials and human capital are also needed, in addition to financial assets. Expected outcomes are unpredictable because of how the financial and economic conditions affect investment (Avram et al., 2009; Miu and Crişan, 2011). After a thorough review of the investment proposal, judgments about investments are made.

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  Managerial Economics

  The Analysis of Business Decisions

  • Stephen Hill(Author)
  • 2016(Publication Date)
  • Red Globe Press

    (Publisher)

  CHAPTER 13 Investment decisions Contents INTRODUCfiON 301 DISCOUNTING 303 PHYSICAL AND FINANCIAL INVESTMENTS: A GENERAL MODEL 307 PROBLEMS WITH DISCOUNTING 309 FINANCING INVESTMENT 312 RISK AND UNCERTAINTY 314 INVESTMENT IN PRACTICE 317 EXPANSION AND DIVERSIFICATION 320 SUMMARY AND CONCLUSIONS 322 APPLICATION 13 324 Introduction Previous chapters have considered the shorter term operational decisions of the firm, such as price , output and advertising decisions, with the occasional look at the longer term implications of those decisions. It is now necessary to examine explicitly the longer term strategic decisions that affect the future viability of the organisation: including financing, growth and investment decisions . In doing so, the emphasis of our attention will shift from the optimal allocation of existing resources to the determination of an optimal level of current and future resources . The primary distinction between operational and strategic deci-sions is in terms of the duration of the decision implications. Operational decisions affect current and near future performance so that mistakes can be quickly rectified. Strategic decisions concern the longer term performance of the firm, and are the consequence of 301 302 Managerial Economics considerable planning, in which various long-term objectives are set in the light of expectations about future demand and cost condi-tions. The introduction of a longer time horizon within the decision framework brings with it two attendant problems. The first is the need to take explicit account of the time value of money, or the need to make intertemporal comparisons of money sums. As we shall see, the appropriate solution to this problem is to calculate the net present value of any future money sum, so that sum is discounted according to its position on the time horizon and the opportunity cost of money. The second problem associated with a lengthening time horizon is uncertainty about the future.

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  Economic and Financial Analysis for Criminal Justice Organizations

  • Daniel Adrian Doss, William H. Sumrall III, David H. McElreath, Don W. Jones(Authors)
  • 2013(Publication Date)
  • Taylor & Francis

    (Publisher)

  The act of selecting involves consideration of the service or product, the quantity in which production should occur, and the identi-fication of the serviced market and its characteristics. Therefore, given these concepts, the financing and allocating of resources that are associated with such decisions represent a long-term, strategic commitment to satisfy the 76 Economic and Financial Analysis for Criminal Justice Organizations © 2010 Taylor & Francis Group, LLC needs and wants of humans with respect to the economic scarcity and avail-ability of resources through time. Because of this commitment, the considered periods of time, financial considerations, and the allocation of necessary resources, the rendering of strategic Financial Decisions is a serious action that implies a variety of rami-fications. Managers and leaders must ensure that their discretion and judg-ment are facilitated through consideration of the best possible knowledge of the decision domain. Decisions must be rendered, as robustly as possible, with respect to any existing constraints of the problem domain. Decisions must also be rendered with respect to the long-term benefit of the organiza-tion, its stakeholders, and society. Decisions must be rendered regarding the maintaining of societal order and the deterring of crime. These decisions and relationships are manifested among a variety of organizational environ-ments representing international, national, regional, state, and local con-structs. Among all cases, leaders and managers have a fiduciary obligation to render decisions that are representative of the best interests of their stake-holders and society. Contexts of Prisoner Labor Within the context of the criminal justice system, the types and quantities of rendered decisions are varied. Within the context of financial management, a variety of correctional programs demonstrate the use of both public and pri-vate monies in a myriad of projects and programs.

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