Question

What is meant by an investment decision?

Give two examples?

Answer 1

Investment decision It relates to as how the funds of a firm are to be invested into different assets, so that the firm is able to earn highest possible return for the investors. Investment decision can be long-term, also known as capital budgeting where the funds are commited into long-term basis. Short-term investment decision also known as working capital decision and it is concerned with the levels of cash, inventories and debtors.

Investment decision can be long-term and short-term.