The long-term investment of a firm involves __________________.

Irreversible investments

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Investments which benefit the firm for number of years

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All of the above

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None of the above

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Solution

The correct option is C All of the above
Long-term decisions involve setting up of the firm, expansion, diversification modernization and other similar capital expenditure decisions requiring huge investment made by raising long-term sources, the benefits of which can be seen only in the long term. Because of the huge investments involved these decisions are irreversible.

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