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Discuss the idea that effective capital investments produce a positive net-present value through improving a firm’s...

Discuss the idea that effective capital investments produce a positive net-present value through improving a firm’s competitive advantage. Take care to explain what you mean by competitive advantage, and to illustrate your answer by reference to one or more relevant examples.
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Answer #1

Effective capital investment in business can improve goods or services quality or produce goods in more trending fashion .By using new technology business can successfully increase its sale by providing goods or services of same quality at lower prices.It will results in increase in cash flow that ultimately increase the net present value.

Competitive advantage

It is firm's ability to produce goods or services more efficiently than its competitors.Many factors involved in competitive advantage like cost,brand quality,after sale service.

Example

A firm of china offer same product at lower cost than firm in U.S since labour is available in China at cheaper cost.

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