Many people, when they hear the term "investment", probably think of investing in financial securities. However, investing is not only limited to financial securities. It is a broad term referring to the process of putting money in something of value for future returns. In other words it is acquiring an asset or item with the objective of producing income. The basic process of investment always involves an initial outflow of some assets (such as money, time, etc.) with the expectation of an increased return in the future in terms of income or increase in capital.
Why do Companies Invest?
There are many reasons for the investments made by businesses. The main ones are:
Strategic and/or Tactical Reasons: For example companies invest in new projects for capturing new markets. They invest in property, plant, and equipment for expanding their productive capacities, consequently exploiting economies of scale. They invest in technology for improving their products, services, and maki (...) Read more? Sign up for free