Investment

Investment

Capital budgeting is crucial in marketing decision making.  Capital budgeting falls under-investment topic, and it was one of the hardest concepts to comprehend because it entails calculation to make the decision. Through the help of internet resources from Google scholars and financial journal articles, I figured out the concept of capital budgeting. The decision on the investment can take time to mature as such has to be founded on the return of which that investment will make (Nawaiseh et al. 2017).  If the investment is unprofitable for a very long time, then it will be unwise to invest in such ventures. Therefore, it is better to determine the present value of future investment or how long it will take to deliver returns before going ahead with the investment. It could even be more profitable to put the planned investment money into the bank and then earn interest or even invest in a rather alternative investment. The increased amount of money can be lost or wasted the investment turns out to be wrong or even uneconomic. The subject matter was also hard to grasp due to the mathematical content involved.

The context seeks to build on the concept of the future value of money, which can be used or spent now. This approach can be arrived at through net present value as well as the internal rate of return and the annuities. Additionally, the timing of the cash flow is crucial in the new investment decision; as such, the concept looks at the payback data. The economic evaluation of the investment proposal stipulates the decision rule for accepting or rejecting the investment project. The time value of money focuses on the importance of borrowing. If the borrowing return on loan exceeds the cost of the borrowing fund, then the decision must be rejected. Lending “is only worthwhile if the return is at least equal to that which can be obtained from alternative opportunities in the same risk class” (Nawaiseh et al. 2017)

References

Nawaiseh, M. E., Al-nawaiseh, H., Attar, M. D., & Al-nidawy, A. (2017, September). The Use of Capital Budgeting Techniques as a Tool for Management Decisions: Evidence from Jordan. In International Conference on Engineering, Project, and Product Management (pp. 301-309). Springer, Cham.

Investment

Capital budgeting is crucial in marketing decision making.  Capital budgeting falls under-investment topic, and it was one of the hardest concepts to comprehend because it entails calculation to make the decision. Through the help of internet resources from Google scholars and financial journal articles, I figured out the concept of capital budgeting. The decision on the investment can take time to mature as such has to be founded on the return of which that investment will make (Nawaiseh et al. 2017).  If the investment is unprofitable for a very long time, then it will be unwise to invest in such ventures. Therefore, it is better to determine the present value of future investment or how long it will take to deliver returns before going ahead with the investment. It could even be more profitable to put the planned investment money into the bank and then earn interest or even invest in a rather alternative investment. The increased amount of money can be lost or wasted the investment turns out to be wrong or even uneconomic. The subject matter was also hard to grasp due to the mathematical content involved.

The context seeks to build on the concept of the future value of money, which can be used or spent now. This approach can be arrived at through net present value as well as the internal rate of return and the annuities. Additionally, the timing of the cash flow is crucial in the new investment decision; as such, the concept looks at the payback data. The economic evaluation of the investment proposal stipulates the decision rule for accepting or rejecting the investment project. The time value of money focuses on the importance of borrowing. If the borrowing return on loan exceeds the cost of the borrowing fund, then the decision must be rejected. Lending “is only worthwhile if the return is at least equal to that which can be obtained from alternative opportunities in the same risk class” (Nawaiseh et al. 2017)

References

Nawaiseh, M. E., Al-nawaiseh, H., Attar, M. D., & Al-nidawy, A. (2017, September). The Use of Capital Budgeting Techniques as a Tool for Management Decisions: Evidence from Jordan. In International Conference on Engineering, Project, and Product Management (pp. 301-309). Springer, Cham.