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Walden WMBA6681 WEEK 5 Discussion 1 Qualitative Considerations and Linear Profit Models

Walden WMBA6681 WEEK 5 Discussion 1 Qualitative Considerations and Linear Profit Models

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Walden WMBA6681 WEEK 5 Discussion 1 Qualitative Considerations and Linear Profit Models


Discussion 1: Qualitative Considerations and Linear Profit

Quality is much better than quantity. One home run is much
better than two doubles.

—Steve Jobs, American entrepreneur and cofounder of Apple
Inc. (Burrows & Grover, 2006)

Quantitative data goes only so far in a business: the human
element of business and accounting is invaluable. It is difficult for computers
and algorithms to determine quality of content. Qualitative considerations
matter when making any decision in life, and financial decisions related to
linear profit modeling are no exception. For this Discussion, you analyze the
qualitative considerations of linear profit modeling. You analyze some of the
tools that managers use when they make decisions, develop external reports, and
control organizational activities. Specifically, you focus on linear profit
modeling as a means for calculating break-even point and target profits.

To prepare for this Discussion, review the article “Whopper
to Go” from this week’s Learning Resources. Then consider how Burger King’s
profitability problems can be framed in a linear profit model. (Note: Numbers
are not required to frame this problem mathematically.)

By Day 3

Post your response to the following:

How do linear profit models relate to GAAP-basis income

In terms of qualitative considerations, what are the
limitations of using linear profit models as it applies to the Burger King

Are these limitations present in all linear profit models?
Why or why not?

Why might it be useful to frame Burger King’s profitability
problems using a linear profit model despite the limitations of the model?

Be sure to support your work with specific citations from
this week’s Learning Resources and any additional sources.

Read a selection of your colleagues’ postings.

By Day 5

Respond by Day 5 to two or more of your colleagues’ postings
in one or more of the following ways:

Expand on a colleague’s initial posting by suggesting
additional reasons why linear profit models are used despite their limitations.
Support your suggestions without simply restating your initial post.

Compare your initial posting with that of your colleague,
explaining similarities and differences in your explanations of the relation
between linear profit models and GAAP-basis income statements.

Suggest to a colleague other connections between linear
profit models and financial decision making that could strengthen his or her


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