Better decisions- Intuitive or Analytical?

Better decisions- Intuitive or Analytical?

A Bat and a ball cost together Rs.110. The bat costs Rs. 100 more than the ball.

What is the cost of the ball?

This simple question took wicket of many in the past.

Whether person is an expert in the field of finance or not , most will give an answer that would be wrong.

Reason is that the question appears to be so simple that most people presume that there is no need to do much of thinking. And catch lies there.

The obvious and quick answer is Rs. 10. Which is wrong .

The correct answer if you really apply your mind after reading the question once again is Rs.5.



Let us solve the problem systematically-

Let’s say the cost of the ball is X

Therefore Cost of the bat = X + 100

Cost of the bat + ball therefore = X + X + 100 = 110

Thus 2X = 110-100 = 10 . Therefore X = 10/2= 5


Let’s check – Ball costs Rs . 5 . Bat costs Rs. 100 more than the ball = 100+5 =105

Bat + ball = 105+ 5= 110


Why most people make mistake, is because most use intuition for taking decisions.

But that approach in financial field could lead to erroneous decisions as we could see in the simple example.

Many a times in the area of finance, what is required is hard analysis of facts for proper understanding of the issue which helps you to take better decisions.

Professionals at times end up taking decisions affecting the profit of the firm more based on intuition rather than proper analysis of information. The reason could be that such information is simply not available at the time of decision making but this could be risky approach.

No more.

Eff factor ensures right information for decisions which are informed decisions and not purely intuitive. EFF Factor plus your intuition will surly make a great pair.

Evolve with EFF Factor.

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