How would you determine if the investment in improving a product by further processing or adding...

How would you determine if the investment in improving a product by further processing or adding better materials would be beneficial?

Expert Solution

To determine the profitability from the investment to be made, these require a deep analysis on various factors to reach to the conclusion that is it good to invest on this or not.

The ways to determine these are :

A market analysis of the the product should be done to find out what improvements are essentially required to enhance the quality of product so that customers would buy the products.
The total cost that the company has to bear in making that improvement has to be judged that whether it is capable of generating profit more than what is being invested. If it is generating more than what is invested, oy then us it beneficial to be invested on.
It also needs to be analysed that after making improvements, whether those improvements would lead to increase in the demand of the product among customers or not.

These are the ways to decide the investments being done would be beneficial or not. And if after these analysis it is proved that investment is worth doing, one should proceed.

ekkarill92 answered 1 year ago

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