Investment make money no online
Investment is the addition made in factors of production.The investment is the part of the savings made out of profit. The profit earned by firm or industry is either saved or spent for for investment. This investment may be in the form of machinery or improved techno logy. The motive of this investment is to increase production.
When production increases per unit cost of production goes down. As a result of this decrease in production cost,profit icreases.This profit is further saved and invested.In this way a series began which contino us till per unit cost of production continue decreasing. When this cost began to rise there is no use of further investment.
Investment is part of profit earned. This earned profit is either saved or invested. It is a part of income for person and of profit for industry.
Now a days there are different means to get capital for investment. Different kind of organisations provide quick and easy loans. These loans are provided for predefined terms. Monthly interest is charged on the sum credited.
Alongwith paying the monthly interest you have to hoard same amount to pay back the loan.It is therefore clear that you must have pre-arrangements for paying atleast monthly interest. Otherwise this monthly interest will go on adding with amount loaned and interest will be charger on new amount. The interest of next month will be charged on this new amount. Thus the sum of money to be repaid will go on increasing. In this way a crucial circle will start which ends with bankrupsy of the loan taker.The loan giving intitutions have a pre-agreement to success the estates of loan taker if no t repaid.
Therefore if you want to take loan for investment ,you must be confident of increase in production and profit.But there are several fluctuations in market.The profit is liable to change or even decrease.
It is therefore suggestible to make investment s out of profit earned by the firm. It never cause any kind of lose to firm.
Investment should always be made after watching market conditions.If demand is increasing and number of firms is small,then it is profitable to make investment. If price or demand of product are observed to decrease in future ,there is no use of making investment.
But without investment there is no scope for firm to expand. It is essential for development of industry.
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