Advertisements
Advertisements
Question
State how 'Long term Investment Decision' and 'Short term Investment Decision' affect the business.
Advertisements
Solution
- Long-term and short-term investment decisions might have differing effects on a corporation. Long-term investments can help a company grow and extend its operations, but they are also risky and could not produce returns for several years. Short-term investments can help a company manage its cash flow and satisfy short-term financial obligations, but they may not yield large returns and are susceptible to market changes.
- Finally, the type of investment decision made by a company is determined by its overall strategy, financial goals, and risk tolerance. A balanced approach that considers both short-term and long-term factors can help a corporation achieve its financial goals while efficiently managing risk.
APPEARS IN
RELATED QUESTIONS
The size of assets, the profitability and competitiveness are affected by one of the financial decisions. Name and state the decision.
Give the meaning of 'Investment' and 'Financing' decisions of financial management.
“A capital budgeting decision is capable of changing the financial fortunes of a business.” Do you agree? Give reasons for your answer?
‘Zenith Mall’ is a famous shopping mall in Mumbai, owned by ‘Pinnacle Group'. It is very popular for its international and national brands of fashionable clothes, restaurants, cinema halls and food courts.
The management of Pinnacle Group has decided to open a new branch of the mall in Pune. This decision was very crucial for the management as it involves huge amounts.
- Identify and state the financial decision involved in the above case.
- State any two factors affecting the decision identified in (i) above.
What is meant by ‘Investment Decision’?
Which core financial management decision addresses where to invest funds?
Which core financial management decision addresses how to raise funds?
What is the aim when firms choose where to invest scarce funds?
What does the investment decision allocate funds to?
What is another name for a Long-term Investment Decision?
Which set consists of examples of Long-term Investment Decisions?
Which activities are examples of a Short-term Investment Decision?
What is required before committing funds to Capital Budgeting decisions?
Which effects are associated with Capital Budgeting decisions?
When risk is the same, which project is preferred?
