Relationship between investment, profit & cash flow

IB Business Management: Relationship between investment, profit & cash flow

In Business Management, the term investment refers to the purchase of fixed assets (such as equipment and machinery), with the intention of creating a financial return (profit) in the future. It is therefore also known as capital expenditure. Investment often requires a large initial amount of cash (for purchasing the fixed assets), so this can have a negative impact on the organization’s net cash flow. However, in...

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