Assignment #9

How will you evaluate your INVESTMENT decision. Please give us your own steps of evaluating.

An investment is an asset or item purchased with the intention of earning income or

increasing in value. An increase in the value of an asset over time is referred to as appreciation.
When a person buys a good as an investment, the intention is not to consume the good but
rather to use it to create wealth in the future. An investment is always the outlay of some
resource today in the hope of a greater payoff later than what was initially put in. For example,
an investor may buy a monetary asset now with the expectation that it will provide income in
the future or that it will be sold at a higher price later for a profit.

If I must invest, the first step that I will take is to ask myself if it is a good investment. I
will conduct a cost-benefit analysis of the investment to ensure that it is a good fit for your
company. Next is to ask myself what risks I could face if I don’t invest. Could it limit my ability to
make other necessary investments?