How Do I Choose the Best Reinvestment Plan?
An investment plan is also called a capital budget, a plan for raising and using investment for a specific period of time prepared by a capitalist government or enterprise. There are two types of long-term plans and annual plans. The contents of the plan, apart from the itemized investment expenditures of the capital goods required for construction and purchase, and their corresponding sources of funds, should also explain the general operating conditions and the choice of investment projects. Since the investment is not unlimited, the main problem in the investment plan is how to allocate the limited investment to the most effective project. The preparation of an investment plan is essentially a decision-making process, which is to choose the best option among various investment plans. When capitalist companies choose investment plans, they place particular emphasis on the time value of money. This means that earning a dollar today will be more valuable than earning a dollar in the future. For this reason, the investment plan not only considers the maximum benefits of the project investment, but also pays special attention to the early benefits after capital investment. Generally, it is arranged to achieve higher income in the first few years, and postpone low income to later years. . In a market economy, this method also has important reference value for us. [1]
investment plan
- Included in the investment plan
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