Differential Cost Approach To Business Decision Making.

. An entrepreneur is always faced with two real dilemmas when they have to make crucial business decisions. The first is a limiting factor and the second is knowing how to pick the best among alternatives at a given time.The limiting factor, otherwise known as the principal budget factor is a key factor that worksContinue reading “Differential Cost Approach To Business Decision Making.”

How Important Is The Capital Structure Ratio; Interest Cover Ratio?

Suddenly the demand for your company’s products is overwhelming its existing capacity to meet it. It’s either you rise to the occasion and meet increasing demand or you lose the patronage to a competitor and fizzle out. You don’t want to fizzle out, so you must approach investors for long-term funds. Investors will want toContinue reading “How Important Is The Capital Structure Ratio; Interest Cover Ratio?”

Why Is Bayes Theorem Important For Finance and Business?

UPDATED: Have you had a reason to wish you could predict with near accuracy what the future holds? It’s possible to predict with a high level of confidence what the future has in store based on prior information. You could use Bayes theorem or Bayes rule to determine the conditional probability of events.Note that aContinue reading “Why Is Bayes Theorem Important For Finance and Business?”

5 Reasons WACC Is An Effective Investment Decision Making Tool.

The life of an entrepreneur depends on their ability to make sound investment decisions. Sound investment decisions guarantee sustained profitability. Sustained profitability guarantees the attainment of the going concern status.  So a company  that is in the business of long term investments must be armed with investment decision making tools that helps in figuring outContinue reading “5 Reasons WACC Is An Effective Investment Decision Making Tool.”