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The following could be reasons that would force a company to invest:
1. Availability of profitable investment opportunity with low risk
2. To meet the shareholders expectations for share price increase.
3. To beat the competitors and remain competitive in the industry
As I understood the question the reasons is
1. Reduce production costs 2. Increase sales and profits 3. The market volatility 4. Take advantage of overproduction
I'm waiting for comments if error
I stand with Mr, Md. Fazlur Rahman<<<<<<<<<<<<<
I prefer to wait for Experts answer
competition, efficiency, marketing are constraint with pushes company to invest,
In addition to Mr. Fazlur response,
Companies are investing also forcefully in order to comply in Safety requirements and to comply audit requirements, this type of investments are part of compliance issues and not necessarily to increase profit.
1) Shareholder's expectation of profits.
2) Ideal cash piling up which may be used to acquire or invest in suitable avenues to generate profits.
3) Upgradation of technology,systems etc to remain competitive in business
4) In unusal cases, it may be an effort to hide some fraud like it happened in the case when satyam decided to acquire its sister concern maytas at unusual high pricing to justify cash outflows
.........................I agree with Mr. Ahmad Kamal.
I agree with Mr. Ahmad Kamal......
Thank you for the invitation. I agree with the answer M. Fazlur Rahman
Agree with experts answer.
