There are several phases through which investment decision making could be proceeded, which are based on scientific bases. As it traditionally commences with the accurate identification of the matter or the problem the subject of the decision, then the identification of the available or the possible alternatives for handling the problem. In addition, it goes through the identification of shortcomings associated with every alterative that has been identified, in addition to the comparison between the shortcomings and the presented alternatives. Consequently, the investment decision could be made. We will tackle in this article the phases of investment decision making in details.

What are the phases adopted in the process of investment decision making?

Identification of the quality of investment the subject of the study

Traditionally, there are three kinds of investment, i.e. the first kind is the new investments with the aim of generating production capacity that didn't exist. And the second kind of this investment is the expanded investments, which are represented in additional investments to the established ones with the aim of adding production capacity. The third kind of it is the investments related to the replacement or renovation or the replacement of assets to others.

Identification of the available alternatives:

That's where the available alternatives vary before the decision maker, or in other cases, these choices could be limited in one alternative. As for the first cases of diversity, the pros and cons of the whole alternatives are identified in preparation of selection. And as for the second cases, they are related to the determination of the cost and the profit related to the only presented alternative.   
 
Identification of the pros and cons of every alternative:

The pros and cons of every alternative could be identified through adopting objective methods of assessment, which, in being applied, give every alternative digital results reflecting the final result for the correspondence between the cost and the profit related to the presented alternative.

 
Investment Decision Making:

Investment decision making is done through the results of the previous phases, and that's after adopting the alternative which results in the best digital results. As it's logic that there will be one alternative in this case, therefore, the decision will be positive or negative according to the results concluded from the alternative assessment with the used methods.

According to the above mentioned we conclude that the investment decision is included within the circle of the profit and cost analysis. It's an economical theory suggesting that the investment decision is described by positivity when the profit exceeds or covers the cost in the most pessimistic cases.

Among this field, the British Academy for Training and Development provides advanced and professional courses on long-term assets and financing decision, and liquidity management and financing plans for emergency and others related to investment decision making and funds management.