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Hi,
I would like to ask if the following could be clarified
1. In Q1 Jun’12 – answer mentions “cash measures” of performance – what do they mean by cash measures, is that about showing cash flows?
The business in question probably doesn’t sell too much on credit anyway so cash shouldn’t be an issue ?
2. Q 3 Jun’14 – there is a comment about minimax regret in the Tutor Note saying that “minimax is not clearly focused on obtaining a minimum level of return” – I am not very clear how does this comment relate to the question?
Ensuring that loses are small is as good as ensuring profit for Riemann?
Why minimax regret is not recommended here?
What would be the most appropriate occasion when that method should be used as opposed to minimax (that is assuming we have a choice to go for one or the other)Thank you
Cash measures: cash flow, EBITDA, NPV (cash flows rather than earnings)
I wouldn’t worry about minimax regret. The reasoning a person has to go through to work out regreats then do a maximin is very convoluted and one is not sure what has motivated them. Besides it’s time-consuming to work out.
I would never choose minimax regret.
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