investment dicision is the most important of the firm's three dicisions.
it begins with the amount of assets a firm need to be held by the firm. picture of the firm balance sheet in your mind for a moment. the financial management need to determine the dollars amount that is above the double line on the left hand side of the balance sheet- that is the size of the firm. even the number is known the composition of the assets must still be decided. for example how much of the firm total assets must be devoted to cash or inventory. also the flip side of the firm's investment ot disinvestment must not be ignored.