Question

Why is it important for investment decisions to consider the expected return on investment and cost of capital?

a.

To maximize profits

b.

To minimize risks

c.

To avoid liquidity crunch and solvency problems

d.

To gain market leadership in terms of product development

Posted under IC 89 Management Accounting

Answer: (c).To avoid liquidity crunch and solvency problems Explanation:It is important for investment decisions to consider the expected return on investment and cost of capital to avoid liquidity crunch and solvency problems.

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Q. Why is it important for investment decisions to consider the expected return on investment and cost of capital?
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