Investment Expenditures

Financial managers have to make decisions that affect the firms present and future. The further progress of the firm depends on their management.

Financial leaders make attempts to achieve wealth maximization in the future. They do this through engaging in daily activities including inventory and credit management. Financial managers also do this through some long term decisions that are related to raising funds. Although these decisions affect the present situation of the firm, but they also predict a positive change in the future of the firm. The present of the firm differs from the future in many ways.

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Firstly, the investment expenditures of the firm at the present moments include a lot of spending for the firm (Block, 2009). This affects the profitability. The firm has a lot of expenditures which are derived from the profits, and this affects the firm’s running. However, in the future, these investment expenditures will start bringing a lot of profits, and will cause growth (Brigham, 2010). The present investments of the firm also act as a barrier towards the growth of the firm. However, in the future, the firm will have enough profits, and this will pave the way for a great growth of the firm.

The firm needs to invest in hiring good accountants and logistic managers so as to adjust to these differences. These managers ensure that the present investments of the firm will bring good returns in the future, and they also ensure that the future profits, invested in a proper way, will help to develop. This will help in securing the future of the firm; increasing profits. Moreover, these investments enlarge the firm’s chances of survival in the future.