Investment Decisions in Small Business

Download or read book Investment Decisions in Small Business written by Martin B. SolomanJr. and published by University Press of Kentucky. This book was released on 2014-07-15 with total page 161 pages. Available in PDF, EPUB and Kindle. Book excerpt: How to choose the investment that will give the best return is a problem faced by all businessmen. Yet for the small businessman in particular, the literature on capital budgeting intended to help him in his investment decisions seems not to apply to his actual situation. Here in this study, theory and practice are brought together within the context of small business. Author Martin B. Solomon Jr. compares two theoretically sound formulas—present value and the discounted rate of return—with simpler methods of calculating the returns on investments. The superiority of the refined methods, he points out, is practically nullified under the usual conditions of uncertainty. The primary need of the small businessman, Solomon concludes, is not for better methods of ranking alternatives but for the reservation of a portion of his time for seeking a variety of investment opportunities through the greater exercise of imagination and creativity.