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
Controlling material flow Figure below outlines the progressive stages in purchasing, issuing and recording materials in a manufacturing concern. An efficient system of docume

Advantages of kaizen costing 1) Record individual tasks 2) Instantly replay observation 3) Select and use best practice 4) Categorize activities using kaizen terminolo

RELEVANT COSTS FOR NON-ROUTINE DECISIONS A relevant cost is a cost that is appropriate to a specific management decision. To be relevant, a cost should be: 1) Future cost

Morrow Company applies overhead based on direct labor hours. At the beginning of the year, Morrow estimates overhead to be $620,000, machine hours to be 180,000, and direct labor h

MNO Ltd produces and sells for $25 an office machine for which there is a heavy demand which the company is prevented from meeting because of a shortage of skilled labour. The dire

Techniques of CVP Analysis  The CVP  analysis deals with the price costs structure and the sales volume and identifies the profit figure with one or other combination of these

question 3.5A Trial balance sheet,income statement, owner''s equity and balance sheet

Decision-making is an integral part of all management functions. It is the process of choosing the among alternative courses of action. Managers have to


Select Appropriate Alternative Courses of Action In practice, decision-making includes choosing among competing alternative courses of action and choosing the alternative which