Net profit value is the difference between cash inflows and outflows measured in a specified time, while the internal rate of return assists in determining whether or not to invest. Both measurements help in capital budgeting, allowing businesses to estimate the value of future investments and expansions (Nariswari & Nugraha, 2020). Before any investment is made, the measurements predict the benefits of an investment, enabling managers to decide whether or not the investment is worthwhile. I would need the two measurements to direct choices made in my business.
Organizations must ensure the decisions they make minimize long-term risks while increasing short time profits to survive and grow in a competitive market. When making cost decisions in accounting and capital budgeting, they should focus on the associated impacts on the entire business. More finances should be allocated for decisions that promise profitability than those associated with losses or uncertainties. Overall, strategic decision-making methods in business costs ensure informed use of finances, maintaining stability and growth of a business. When leaders develop strategic decision-making skills in the financial sector, the future and potential avenues for success become clearer. The organizational goals are met with minimal costs, and products can be offered to customers at affordable prices.
The WH framework comprises a set of guidelines used by employers and employees to determine the impacts of choices in a business. The W represents all the people and organizations with a stake in the firm’s success, and the H represents the ethical concepts and guidelines for decision-making and moral deliberation. I would use this framework to assess all the impacts of all significant decisions in the business before they are implemented. Some decisions may cause more harm than positive contributions, which can be avoided by utilizing the concepts and guidelines of this framework. The decisions passed, therefore, would be ethical (causing more benefits than harm), maintaining a good reputation for the company.
References
Morales Burgos, J. A. M., Kittler, M., & Walsh, M. (2020). Bounded rationality, capital budgeting decisions, and small business. Qualitative Research in Accounting & Management, 17(2), 293-318. Web.
Kwilinski, A., Ruzhytskyi, I., Patlachuk, V., Patlachuk, O., & Kaminska, B. (2019). Environmental taxes as a condition of business responsibility in the conditions of sustainable development. Journal of Legal, Ethical and Regulatory Issues, 22(2), 1-6. Web.
Nariswari, T. N., & Nugraha, N. M. (2020). Profit growth: Impact of net profit margin, gross profit margin, and total assets turnover. International Journal of Finance & Banking Studies, 9(4), 87-96. Web.