Kamini runs a designer boutique in Gurgaon. She's doing well in terms of profits. She wants to open branches in different parts of India. Identify the type of decision
Answers
This type of decision is referred to as investment decision.
What is investment decision?
- An investment decision is made by pondering over the funds made through an investment and their potential.
- When a business is successful, a person tends to expand it in order for better opportunities.
- Capital budgeting decision is another term which is used for investment decisions which have longer lasting potentials.
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Answer:
The decision which is being taken by Kamini is investment decision.
The investment decision relates to how the establishment's finances are invested in different means. Investment decision can be long- term or short- term. A long- term investment decision is also called a Capital Budgeting decision and short- term is Working Capital Decision. The factors that will affect this decision are :
(a) Cash overflows of the design When a company takes an investment decision involving huge amount it expects to induce some cash flows over a period. These cash overflows are in the form of a series of cash bills and payments over the life of an investment.
(b) The rate of return The most important criterion is the rate of return of the design. These calculations are predicated on the awaited returns from each offer and the assessment of the trouble involved.
Explanation:
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