Question

Write a short note on Short term investment decisions?

Answer 1

Short-term investment decisions, also known as the working capital decisions, are the ones concerned with the day-to-day requirements of a business. For instance, decisions regarding the level of cash and inventory are short-term investment decisions. A number of factors affect such decisions, some of which are as follows.

• Nature of business
• Production cycle
• Scale of operations
• Growth prospects
• Availability of raw material
• Level of competition