Page 307 - SBL Integrated Workbook STUDENT 2018

Financial decision making

Decision making

4.1 Typical decisions

 Accepting one-off contracts

 Closing a division

 Abandoning a project.

4.2 Relevant costs

 future – ignore money already spent

 incremental – ignore any costs which don’t change

 cash – ignore accounting estimates such as depreciation.

Illustrations and further practice

Now try TYU question 4.

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