Question

Which among the following is a type of investment expenditure?

• A. Real investment
• B. Induced investment
• C. Financial investment
• D. All of the above

Answer 1

The correct option is D All of the above

Investment expenditure refers to the allocation of a proportion of money in something in expectation of receiving some benefits in future in terms of money or kind with the principle investment. All investment mentioned above are investment expenditure.

1. Real investment refers to the allocation of a proportion of money in stock of capital like tangible assets etc. in expectation of receiving some benefits in future in terms of money or kind with the principle investment.

2. Induced investment refers to the allocation of a proportion of income in the business in expectation of receiving some benefits in future in terms of money or kind with the principle investment.

3. Financial investment refers to the allocation of a proportion of money in financial assets like shares, debentures etc. in expectation of receiving some benefits in future in terms of money return with the principle investment.