Risk-fundamental uncertainty-decision making environment, Managerial Accounting

Risk:

Risk includes circumstances or events that may or may not take place though whose probability of occurrence can be predicted from the past records. In this atmosphere, the states of nature are not certain however probability distribution can be assigned.

Fundamental uncertainty:

Uncertain events are those whose output can’t be predicted with statistical confidence. In this atmosphere the states of nature are not recognized nor are their probability distribution. The decision making procedure depend on risk attitude of the decision maker.

Competition:

In this environment the decisions prepared by the firm are exaggerated by decisions made by another firms with contrasting interests.

Decision Making Beneath Risk and Uncertainty:

Before looking at the various methods of making decisions beneath risk, we shall look at the three major risk attitudes that distinguish various decision makers.

Posted Date: 12/4/2012 6:48:18 AM | Location : United States







Related Discussions:- Risk-fundamental uncertainty-decision making environment, Assignment Help, Ask Question on Risk-fundamental uncertainty-decision making environment, Get Answer, Expert's Help, Risk-fundamental uncertainty-decision making environment Discussions

Write discussion on Risk-fundamental uncertainty-decision making environment
Your posts are moderated
Related Questions
Exercises 2-1, 2-2, 2-3, 2-4 Problem 2-14 I didn’t write every question down out of the book just questions 2-1, and 2-2. Exercise 2-1 classifying manufacturing cost. Your boat,

Fixed assets turnover ratio Meaning: this ratio establishes a relationship among net sales and fixed assets. Objective: the objective of computing this ratio is to verif

FLEXIBLE BUDGETING Flexible budget may be used in one of two ways: Planning and Control. At the planning stage when budgets are set, to reduce the effect of uncertainty. For ex

State performance budgeting according to carter performance According to carter performance budgets use statement of mission goals and objectives to explain why the money is be

implications of applying accounting concepts wrongly

Explain with examples five areas where linear programming can be applied in Managerial accounting

Selective Inventory Management The inventory of an industrial firm generally comprises thousands of items with diverse prices, usage and lead time, as well as procurement and/o

What are the Objectives of budgetary control 1) Planning : planning is an important managerial function. it helps to decide in advance, what to do how to do it when to do it a

What is cvp?

a annual sales are 585000 unit. the purchase price per unit is $2. the carrying cost is 26% of purchase price of goods safty stock is 100000 units on hand two weeks are required fo