Businesses must make long term investment decisions or sustainability. Critical
ID: 2648380 • Letter: B
Question
Businesses must make long term investment decisions or sustainability. Critical questions such as which assets to invest in and at what cost to the organization are crucial to the future viability of the business. What is the role and importance of making wise investment decisions and what impact could those decisions potentially have on the survival and financial success of the organization? Businesses must make long term investment decisions or sustainability. Critical questions such as which assets to invest in and at what cost to the organization are crucial to the future viability of the business. What is the role and importance of making wise investment decisions and what impact could those decisions potentially have on the survival and financial success of the organization? What is the role and importance of making wise investment decisions and what impact could those decisions potentially have on the survival and financial success of the organization?Explanation / Answer
Company should make investment decision on the basis of NPV. For this company should consider each investment seperately If there are mutually exclusive projects then only combined NPV of project should be considered. NPV evaluates the project after taking into account inflation(Discounting Factor) If NPV is positive then it means project should be accepted since it is giving benefit even after discounting it on the basis of discounting factor. So if the company makes investment decisions on the basis of proper evaluation then it will ultimately result is surviaval of the organisation and will lead to its success.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.