Chapter 8 Discussion Forum-Original Post

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This chapter focuses on managerial decision making. Most decisions are driven by quantitative, financial (dollars and cents impacts of a decision choice) information. However, relying on financial information alone and ignoring pertinent non-financial information can lead to regrettable decisions sometimes.

Provide at least two examples of a decision that should be influenced by financial as well as non-financial information.

Also, below is a brief case involving an automobile lease v. buy decision. Think it over and answer the 3 short questions at the end of the case.

A person is considering buying a new car versus leasing one. The car being considered for purchase would cost $15,000 in cash, and will depreciate in value over the next 36 months to $6,000. The leased vehicle retails for $15,000 today, would require $3,000 at signing, would have monthly payments of $200, and be worth $9,000 at the end of the lease term, assuming normal driving conditions and less than 12,000 miles per year.

What information is relevant to the decision to buy or lease a vehicle?

What information is irrelevant?

Which alternative is least expensive (assume operating costs are identical) Show calculations?

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