One Friday afternoon years ago I was sitting in my office as the CEO of a...

50.1K

Verified Solution

Question

Accounting

One Friday afternoon years ago I was sitting in my office as theCEO of a young software company, when my department heads ofsoftware development and finance came in separately to each requestan additional $125,000 in funding. My software development directorwanted new product testing equipment and my CFO wanted to upgradeour accounting and business systems software. Both were legitimaterequests that would help move the business forward. I couldn’t helpbut laugh: In the span of 10 minutes I was being asked to approvetwo unplanned expenses of $125,000, and they were as different asapples and oranges. Framing the Problem This story captures thedilemma faced by CEOs every day and is unique to the job.How do you compare two expenses that have almost norelation to each other?
When you have to decide between two expenses, you choose the onethat you think based upon your experience will generate themost.
True or False and why please:)

Answer & Explanation Solved by verified expert

3.9 Ratings (740 Votes)

To compare the two expenses that have almost no relation to each other the CEO should first of all spell out the financial goals of his company In other words the CEO should seek to find if the goal of his company is to maximize revenue or is it to achieve revenue growth with a See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member