Capital investment is the act of spending money in order to develop a business by purchasing fixed assets, such as:
• Land,
• Expensive equipment,
• Buildings and more.
Unlike business investment, capital investment has little to do with a business’s daily expenses. One of the main differences between a business and capital investment is quantitative.
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Capital investments are usually much larger and cover larger expenses. Hence, the waiting period for the return on investment can be much longer.
This also increases the risks. This type of investment can lead to much bigger profits, however, so the returns can also be much greater, albeit over longer periods of time.
Also, with capital investments, the business owner can have a much bigger impact on the decision making process, as she can directly delegate how the money is to be spent. This is not always the case with a business investment.
At the end of the day, if you have enough capital and possibly a few years to wait, you can get great return on investment.
