Investment Decisions (AQA A-Level Business): Flashcards
📚Flashcards
Practise the cards
10 cards from this deck
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Practise the cards
10 cards from this deck
Qualitative factors in investment
Qualitative factors in investment
Non-numerical elements influencing investment worthiness
Strategic alignment requirement
Strategic alignment requirement
Investments must align with company objectives and strategy
Corporate image vs short-term returns
Corporate image vs short-term returns
Reputation protection may matter more than immediate ROI
Job losses in investment decisions
Job losses in investment decisions
May cause rejection despite good financial returns
Investment prediction certainty
Investment prediction certainty
All methods rely on predictions; never completely accurate
Market uncertainty factors (5 types)
Market uncertainty factors (5 types)
Exchange rates, sales, tastes, competitors, raw materials
Firm risk attitudes
Firm risk attitudes
Vary by firm: risk-takers seek rewards, others play safe
Sensitivity analysis
Sensitivity analysis
Tests assumptions in decisions via what-if scenarios
Base case
Base case
Scenario created from assumptions about future events
Investment criteria
Investment criteria
Specific conditions required before investment approval