The document discusses investment decisions for financial management. It notes that investment decisions determine the total assets, composition of assets, and involve both long-term capital budgeting and short-term working capital management. It defines investment decisions as a firm's decision to invest current funds in long-term assets that provide benefits over several years, such as expansion, acquisition, modernization, or replacement of assets. Divestment is also considered an investment decision.
The document discusses investment decisions for financial management. It notes that investment decisions determine the total assets, composition of assets, and involve both long-term capital budgeting and short-term working capital management. It defines investment decisions as a firm's decision to invest current funds in long-term assets that provide benefits over several years, such as expansion, acquisition, modernization, or replacement of assets. Divestment is also considered an investment decision.
The document discusses investment decisions for financial management. It notes that investment decisions determine the total assets, composition of assets, and involve both long-term capital budgeting and short-term working capital management. It defines investment decisions as a firm's decision to invest current funds in long-term assets that provide benefits over several years, such as expansion, acquisition, modernization, or replacement of assets. Divestment is also considered an investment decision.
the proper management of funds. • The finance manager must see that funds are procured in such a manner that: Risk Cost Control considerations are properly balanced and there is optimum utilization of funds. Investment Decisions • Total amount of assets to be held in a firm • Composition of asset • Long term investment decisions: Capital budgeting • Short term investment decisions: Working capital management Nature of investment decisions • The investment decisions of a firm are generally known as the capital budgeting or capital expenditure decisions. • It may be defined as the firm’s decision to invest its current funds most efficiently in the long-term assets in anticipation of an expected flow of benefits over a series of years. • The long-term assets are those that affect the firm’s operation beyond the one-year period. • Investment decisions would generally include expansion, acquisition, modernization and replacement of the long-term assets. • Sale of a division or business (divestment) is also as an investment decision. Appraisal of project