Final answer:
It is true that managers use management accounting information to make decisions regarding alternative investments and R&D projects. This information helps them understand costs and potential returns, influencing not only internal decisions but also the perceptions of external investors. As a company grows, widely available financial data becomes key for these judgments.
Step-by-step explanation:
The statement that managers rely on management accounting information to evaluate alternative investment and R&D decisions is indeed TRUE. Management accounting provides critical data and analysis to managers within an organization, helping them make informed strategic decisions that can affect both the short-term and long-term financial success of the company. This type of accounting encompasses a wide range of financial information, including reports on the cost of production, revenues, and budgets, which are essential when determining the potential return on investments and the allocation of resources for research and development activities.
As firms grow and their information becomes widely accessible, detailed knowledge of managerial team members becomes less crucial for outside investors such as bondholders and shareholders. This is because the critical information they need to make investment decisions is readily available through various reports indicating the company's financial status and market position. Nevertheless, managers within the firm utilize management accounting information to operate and steer the company in a profitable direction, often influencing how outside investors perceive the potential and actual performance of the business.
Acquisition of financial capital for various projects, including machinery purchases, new plant construction, or R&D initiatives, can be sourced through different methods such as early-stage investors, reinvestment of profits, loans, or stock sales. In this context, management accounting information serves as an essential tool for managers to assess the best financing options and manage the costs associated with these investments.