Question

What is capacity utilization and it’s relationship with investment

Answer 1

Higher capacity utilization might indicate that the company might need to do fresh investments in plant and machinary to raise the plant capacity so that the company can meet rising demand in the future.

If the current capacity utilization is lower that means for the next few years the company might not require new funding for the capital investments that means lower the capacity utilization lesser the need for new investments in near future.

As the capacity utilization approach 100%, then the company's invesment need would rise to enhance capacity.

the above is answer..