What decision-making concepts have you learned in this class that would assist Mabel make rational decisions?

Ans. Mabel is the instructor of swimming and wants to offer services for learning swimming to adults and children. She wants to start its own swimming pool to provide services of swimming to the people with effective techniques and methods and proper class of learning will be provided to different students according to their learning. Students have to follow the class schedule and learn the techniques of swimming with the Mabel. She has enough saving to buy a swim facility for the people and also have good option for swimming facility.

But Mabel has to take the decision of purchasing the facility when it can handle all the related expenses and have enough cash to settle the swim facility place according to new requirements and demand of the people. Because the decision related to purchasing the facility should be taken according to considering all the facts and expenses related to business. The Mabel also considers its all competitors that are present in the market and attract many customers due to their services. With the investment opportunity she has to spend money on making the pool better and also provide more facilities to the students who come and join the pool classes. Because when the Mabel willing to purchase then she has to take some amount of loan against some amount of interest for the next five years. Mabel must take the rational decision because when she willing to purchase then he has to settle all the related issues and also provide better facility to the people because Mabel want to invest and utilize this investment opportunity with complete thinking and processing because investment opportunity is going to utilize then also provide long term benefit to the Mabel by utilizing this investment opportunity and also utilize its all skills and learning related to swimming.

1.      Create a table/spreadsheet of fixed and variable costs per month based on monthly table of financial data. Explain your classification for each item.

Ans.

Does the monthly table of financial data show the economic profit per month? If not calculate the monthly economic profit or loss.

Ans.     The economic profit per month is $5850 of the swimming facility for the Mabel and also utilizes its investment facility. This will also explain that the revenue of the existing criteria will be manage its all expenses and also give profit to the Mabel.

3.      Acting as Mabel, what financial data will you need to make the decision?

Ans.     According to Mable different financial data is going to use that help in taking the accurate decision of investment and for buying the local swim facility to provide training to different students. The revenue must be consider by the Mabel because its revenue can cover its all expenses and also give profit to the Mabel on monthly basis. Its marketing and website expenses and all other expenses must be manageable according to the business requirement.

It is very important to manage all the expense and also earn more profit for the business. Because investment is consider very important to manage the business and it will help to maintain the image of business and also cover all its expense because when the place is utilize then its update and maintenance cost incur and also cover its all expenses and providing the owner a reasonable amount of profit . because any business can cover its all expenses when it generate the profit with sufficient limit and also enhance the opportunities for further investment. 

4.      Create a spreadsheet that will help Mabel make the decision on adding an additional student to each lesson.

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When the above calculation, it is explain that the additional students per lesson will increase the amount of revenue per month according to given instructions. Other expenses are fixed so they never change with the number of students increase. So its depend on the number of students that how much the Mabel generate revenue for its business and also manage its loan repayment with interest in next 5 years. The additional number of students will be beneficial for the business and also make the investment opportunity more profitable and beneficial for the Mabel.

5.      What cognitive biases should Mabel be on the lookout during the decision making process? Explain your reasoning.

Ans.     During the decision making processes, the Mabel is utilizing the cognitive biases related to investment and business while making the decision according to its requirement. Cognitive biases mean all the important elements that effect the investment decision and also help to promote the decision. There are some different type of cognitive biases that effect the investment and its long term effect. it include anchoring bias, neglect of probability, restraint bias,  bandwagon effect, hindsight bias, oversimplification tendency, incentive caused bias, loss aversion, information bias and confirmation bias.

 These different cognitive biases help to explain different aspect must be consider while doing the investment in the business and also determine all the related past and present information that helpful for the business and help to explain all the data that support the investment opportunities and also promote the business with effective technologies. Cognitive biases help to determine the right decision and also help to explain the actual requirement of the investment and also utilize the authentic source of loan to manage the business and its all expenses. Further Mabel want to utilize its skills and according to cognitive biases the accurate decision should be taken for the investment opportunity. (Cherry, 2019)

6.      Are there other alternative choices that Mable could consider? Make sure to explain likely marginal costs and benefits of the alternative you mention.

Ans.     Mabel is using simple method of costing to determine its profit and also determine its all expenses which are fixed and variable. But Mabel can also use different costing methods like marginal costing or absorption costing. Both type of costing is very important according to accounting point of view and provide major help to determine its profit for the business. in marginal cost the variable cost consider as part of product cost and fixed cost consider as period cost whereas in absorption costing fixed and variable cost both consider as product cost. In marginal costing the profit is estimated by profit volume ratio and in absorption costing profit going to reduce due to involvement of fixed cost.

 Marginal costing determines the cost of next unit but in absorption costing use the cost of each unit. In marginal costing no any affect appear on the cost per unit but in absorption costing any change effect the cost per unit. Marginal costing provides contribution per unit but the absorption costing provide net profit per unit. So different costing methods have different benefits according to business requirement and provide sufficient results for the profit of the business. (wallstreetmojo.com, 2019)

7.      Briefly on your learning of rational decision making and its twin human cognitive biases, what are your choice conclusions on human ability to make the rational decision?

Ans. It is an essential thing to take rational decision as it helps to idealize the main theme of your decision in order to get an authentic idea. This decision has made the things very much clear and appropriate as many of the times it happens that the more you get the idea of your working according to the results you want to arrange in the system you are going to display.

Different types of calculations are going to be done in this scenario as they are going to display. It’s a human nature that they want to highlight those decisions in a different way. Rational decisions are those who do not be challenged as they are according to the discussions that will give them the right choice to select the best and the most highlighted thing among all the aspects very much confidently and appropriately. The more you work hard on this the better you get an enormous result.