INVESTMENT DECISION

Meaning
 Investment decision it relates to as how the
funds of a firm is are to be invested into
different assets , so that the firm is able to earn
highest possible return for the investors .
Investment decision can be long term also
known as capital budgeting where the funds
are committed into long term basis
 Classification of investment decision
 Short term investment decision which involves
management of current assets and working
capital.

 Long term investment decision also known as

capital budgeting
Techniques of evaluating investment decisions

 Traditional or non discounting

techniques
1. pay back period
2. Average rate of return
 Techniques of evaluating investment
decisions

 Modern or discounting techniques

1. Net present value (NPV)
2. Internal rate of return (IRR)
3. Profitability index (PI)
4. Discounting pay back period
Thank you