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five steps involved in managerial decision making, sunk cost

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1. Identify the five steps involved in managerial decision making.
2. What is the difference between an opportunity cost and a sunk cost?

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1. Identify the five steps involved in managerial decision making.

The first steps start with defining the decision or problem. For example, should we lease or buy the equipment? Once you know the decision or task, you can move to step two. Step two is to identify the alternatives that are possible or viable. This usually requires a bit of research. What vendors are willing to lease it? Where can you buy it? What different models would get the job done that is needed? Once the potential equipment sources that meet the specifications are identified, you move to step 3: identify the relevant information and evaluate each alternative. Identifying the relevant information is often hard and requires ...

Solution Summary

Your tutorial is 447 words and explains the five step decision process, giving examples for each step. Examples are given for both sunk and opportunity costs.

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