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Long -Term Investment Decisions

In: Business and Management

Submitted By bates66
Words 1792
Pages 8
Running head: LONG-TERM INVESTMENT DECISIONS 1

Long-Term Investment Decisions
Juanita Bates
Professor: Mohammad Sumadi
ECO 550 Managerial Economics and Globalization
December 5, 2015

Long-Term Investment Decisions 2
Abstract
Microwave food have taken place of the traditional family-styled dining in today’s fast-paced society. There are a variety of microwavable food for consumers to choice from. With today’s health conscious society, the microwave food industry have adapted to meet the preferences of the consumers by producing low calorie frozen microwavable foods. With the growth of this market, it is important that companies in this market have a good marketing plan along with a good strategic business plan. An important long-term decision a business can make is whether or not to invest. The process of evaluating the sustainability of long-term investments with a view of distributing financial resources to investments that are profitable is known as capital budgeting. Capital budgeting focuses on investment costs related to the benefits generated during their economic life. This is one of the most important decisions for a company because it helps with the appraisal and selection of investments that are most feasible. It also helps with the decision of accepting or rejecting investment proposals. Evaluating, classifying, and ranking independent and mutually exclusive long-term investments are completed by using the framework provided through capital budgeting. It helps with the decision on how to allocate scarce financial resources according to the importance of a variety of investment proposals. Long-term investments decisions are based on cost-benefit analysis. The initial capital costs...

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