Investment Justification
The process of explaining and validating the rationale behind resource allocation decisions, often involving ROI analysis.
Implications
The process of demonstrating the value or benefits of a proposed investment, often involving a detailed analysis of costs, benefits, risks, and expected returns, used to support decision-making in capital allocation.
Example
Example: A company prepares an investment justification for a new manufacturing plant by projecting the return on investment (ROI), payback period, and strategic benefits, convincing stakeholders of the investment�s value.
Related Terms
Different from simple cost analysis, which might focus only on expenses, investment justification provides a comprehensive evaluation of the expected outcomes and strategic benefits of the investment.
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