Investment decisions

Investment Decisions, also known as Capital Investment Decisions are the most important financial decisions that an enterprise makes to utilize its funds to secure benefits over a period of time. It’s an integral component of the strategic decision-making of an enterprise or organization.[1]

The term investment decision is interchangeably used with Capital Budgeting or Capital Expenditure Decisions. The decision greatly impacts the future course of the enterprise making the investment decision. Therefore, a series of prerequisite processes and diligent procedures such as Feasibility Study, Pre-FEED, FEED, and Cost Estimation is followed to reach an investment decision.

Once the investors and project owners reach a consensus over proceeding with the investment, it is known as the Final Investment Decision (FID).[2] Hence, FID can be seen as the official start of a project when the real funds are utilized.

Investment decision biases

Bad decisions are often followed by a feeling of investor's remorse.

See also

References
  1. Pogue, Michael (2010-08-20). Corporate Investment Decisions: Principles and Practice. Business Expert Press. ISBN 978-1-60649-065-5.
  2. "Final Investment Decision: Meaning, Definition, and Complete Guide". www.blackridgeresearch.com. Retrieved 2022-10-19.


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