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Select Appropriate Alternative Courses of Action
In practice, decision-making includes choosing among competing alternative courses of action and choosing the alternative which best satisfies the objectives of an organization. Assuming that our objective is to maximize future total cash inflows, the alternative chosen must be based on a comparison of the differences among the cash flows. Consequently, an incremental examination of the total cash advantages for each alternative must be applied. The alternatives are ranked in terms of net cash advantages, and those showing the greatest benefits are selected subject to taking into account any qualitative factors. We shall talk about how incremental cash flows are measured for short-term and long-term choices and the impact of qualitative factors.
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