Question

Capital investment refers to large expenditures to purchase plan assets develop new products or somewhere company stock to or false

Answer 1

Answer :

TRUE

Reason :

Firms or corporations makes capital investments mainly to earn more profit in addition to the profit that they already earn from the existing business activities. For evavlutaing capital investment opportunities, firms use many techniques such as Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, Profitability Index (PI), Accounting Rate of Return (ARR), etc.

But whatever technique they use, the final result will be to decide whether it is worth to make a capital investment or not in the project the looj forward.

The project may be purchasing plan assets or developing new products or invest somewhere in company stocks, etc.