1 Investment is a very broad concept in economics and finance. It has been described in various ways and at various situations.

Investment involves the allocation of financial resources into a venture with the sole aim of making higher returns in the future. In other words, it entails deferring present consumption in order to make a future gain. Therefore, investment can be defined as the commitment of financial resources or other assets to purchase financial instruments or other tangible and intangible assets in order to gain profitable returns in the form of interest, income, or appreciation of the value of the instrument. Thus, it can be concluded that investment is directly related to savings and inversely related to consumption. Since it is the part of the income that is unspent on consumption that can be invested, the level of investment is therefore a function of the level of savings. It is expected that the higher the level of savings, ceteris paribus, the level of investment is expected to increase. Investment could take different forms, ranging from purchase of financial instruments such as shares, stocks, bonds, mutual fund, life assurance, fixed deposits, to purchase of physical assets such as properties, machineries, and other tangible and intangible assets. It could be the purchase of a financial product or asset with an expectation of favorable future returns. It could also involve the purchase of physical goods such as machinery and equipments, inventory, properties in the hope of improving future income. From here, one can conclude that investment is futuristic. That is, it entails taking decision today with respect to the future. In addition, investment involves risks and uncertainty. Since, investment is taking decisions with respect to the future; risk and uncertainty are important element in the investment process. There is some level of risk attached to every investment and this is what determines the returns on the investment. The higher the level of risk involved in an investment, the greater the chances of

greater returns on investments. The expected returns on the investment is a measure of the attractiveness or otherwise of the project. From the aforementioned, it can be inferred that investment is basically a function of income and interest rates (lending rate). An increase in income, other things being equal, encourages investment through increase in savings. On the other hand, an increase in interest rates discourages potential investors from borrowing and investing. In this case, interest rate is the opportunity costs of investing the money because interest would have been made if the money was lent out. B The fact that proper financial management is crucial to the operational success of any organization cannot be overemphasized. It is one of the most important considerations in the success or failure of an organization. The economic fact that resources, including finances, are scarce underscores the importance of sound and appropriate financial management in any organization. The overriding objective of the firm is to maximize profit given the combination of financial and non-financial resources at its disposal and hence, the need to ensure efficiency in the allocation of such resources. The scarce financial resources of an organization can be allocated into various uses but financial management ensures that these scarce resources are allocated into ventures that would generate optimal returns. Financial management according to Olowe (2009) is the managerial planning and control of financial resources of a business to achieve the objectives of the firm. It involves a rigorous analysis of financial decision making within an organization. Financial management is aimed at ensuring that firms takes efficient decisions with respect to the financial resources of the organization. Conversely, it is a known fact that businesses need to invest in physical assets to

grow. There might be need to increase capacity so that they can produce more, sell more and earn more. They could also need to take decisions on physical assets that would increase the efficiency of their operations. Therefore, there is need to examine whether the firms expenditure of physical assets is worthwhile in order to enable managers to be able to make informed decisions regarding the viability of the asset. That is, the need to look at the opportunities, threats and strategies of investing in a particular asset is very vital to the success and survival of any organization. From the above submission, it can be undoubtedly concluded that taking sound financial decisions is vital and inevitable for the success of a firm. However, good financial management is insufficient to guarantee the growth and survival of most organizations. Aside, the sound financial management policies put in place by the organization, business decision relating to expenditure on physical assets is equally important for the growth of the organization. For instance, a firm that raises fund from the financial market must make economically viable and efficient decisions with respect to investing those funds in physical assets or projects or capital expenditure in order to make ensure adequate returns. Most organizations often raise funds from the financial market; the mode and criteria of investing those funds are of utmost importance for the firm to settle its financial obligations and at the same time generate returns for shareholder. While the former deals with financial management, the latter deals with capital investment management. Capital investment management entails decision making on the projects or physical assets of a firm. Capital investment decisions is one of the most critical and crucial decisions of an organization. It is an integral part of the corporate plan of an organization. Beside investment in physical asset such as properties, machines, equipments, capital investment decisions intangible assets such as

copyrights, research and development and working capital. Due to the nature of physical assets and capital expenditure, huge financial resources are usually involved, and this could significantly alter the operations, plans and risk exposure of the organization. This is a more important reason why organizations take capital investment decisions seriously. In capital investment decisions, decisions are usually difficult to reverse. Once a firm commits resources to a particular project, it must ensure that the project is properly executed or lose the initial cost outlay committed to the projects. Therefore, analysis of expenditure on physical assets is crucial to the organizations ability to make viable decisions. As Loto and Odufalu (2008) argued, one of the most significant business decisions is that of capital investment. They concluded that it is the primary focus of shareholders attention. Organizations that carefully handle decisions on physical assets are very proactive and successful. In conclusion, firms make financial decisions with respect to raising capital but decisions about expending the funds raised on various competing physical investments is equally important. Physical investments are usually cost intensive and as a result organizations must endeavor to make viable decisions on investment in physical assets that would enable them meet their financial obligations and the expectation of shareholders. REFERENCES Odufalu, O. & Loto, M. A. (2008). Project Analysis and Evaluation: Principles and Techniques (3rd ed.). Lagos: Concept Publications Olowe, A. R. (2009). Financial Management: Concepts, Financial System and Business Finance. Lagos: Brierly Jones Nigeria Limited.

2 A monopoly is a market structure whereby one firm sells a unique product with no close substitutes. In other words, it is a market arrangement in which only one firms sells and in which entry is blocked to other firms thereby enabling the single firm exercise power over the price or quantity of the product. In a monopoly, a single producer controls the whole supply of a single commodity which has no close substitutes. In reality, monopoly is said to exist when supply of a particular product is dominated by a single firm. In this case, the firm is also the industry. The market is monopolized because of the existence of a barrier to entry of new firms. From the definition of monopoly above, some salient points are obvious. They form the basic assumptions of this market arrangement. The important points are that there is a single seller. He has no competitor and the product in question has no close substitutes. The monopolist has the power to determine either the price or output to be sold in the market. New firms are barred from entering the market in order to maintain the status quo ante. A monopolist unlike the perfect competitor is a price maker. He has the capacity to determine the price or output of the product, but he cannot influence both at the same time. If the monopolist takes the output decision, the price decision is left to be settled by the demand for the product. That is, if he produces a given quantity, the demand curve determines the per unit price at which he sells. Similarly, if he decides to fix the price of the product, the quantity he would sell would be determined by the market. This phenomenon informs the left to right downward sloping demand curve of the monopolist. A monopoly faces a downward sloping demand curve and as such the marginal revenue (MR) is downward sloping. Since in a monopoly average revenue (AR) or price (P) falls as more outputs are sold, the MR is usually less than the AR. So unlike in perfect competition where

AR=MC=Price=Demand, a monopolist have its AR below the MR. The profit maximizing output and price of the monopolist is attained at the output level where MC=MR. The monopoly will continue to produce as along as the MR is greater than the MC. At the point where MC=MR, the profit maximizing output and price of the monopolist is achieved. The diagram below throws more light on the explanation. From the diagram above, the optimal output is OQ. That is the point where MC=MR. The corresponding price at this point, which is the monopoly price OP is determined by the demand curve AR=D. The total cost of the monopolist is depicted by OQCB while the total revenue is depicted by OQDP. The total profit of the monopolist is depicted by the shaded area BCDP. The monopolist can keep the profit for a long time because of absence of competition. This is the way the price of a monopolist is determined using the MC=MR profit maximizing rule. B A competitive firm is such that neither the buyer nor the seller can influence the prices of the product. On the other hand, a firm operating under monopoly is a sole producer of its product because it lacks any viable competition. A competitive firm sets prices at the level of its marginal cost. That is, it sets prices at the point where MC=MR=AR=D=P. Since the firm is a price taker, it accepts the price ruling in the market. Any attempt by the firm to increase price leads to loss of customers to competitors. However, because the monopolist does not have to worry about losing customers to competitors, he can set price above the competitive price. By raising the price of their product, a monopolist may lose some customers but may not lose them all. It may even be profitable to sell at higher prices in most situations. Therefore, a monopoly price would always be higher than a competitive price in order to generate an economic profit

higher than those of the competitive firm. The barrier to entry further gives monopolists the opportunity to influence price in a way that would be advantageous to them. The monopolist sets prices in the elastic region of demand. He sets a higher price above the competitive prices and marginal cost. A competitive firm confronts demand that is infinitely elastic. This is because the firm is unable to influence the price of the products. Thus, it accepts the ruling price in the market and sells an output determined by that price. Monopolists are not price takers like competitive firms but they are constrained by the demand curve. The monopoly can either influence the price or output of the product at a time. He does not have power over both parameters at the same time. They can set their own price and accept a level of output determined by the market, or they can set their output and accept the price determined b y the market. In this case, the prices and output are jointly determined by consumer demand and the firms production cost structure. A monopolist characteristically sets prices at the profit maximizing level. That is the point where MC=MR. The point where the optimum output level determined by MC=MR meets the demand curve would be the monopoly price. Here, the price is higher than the marginal cost of producing the product. The diagram below compares competitive prices with monopoly prices.

monopolist MC

AC

C q

B AR=D=P MR

Competitive firm MC

AC P A MR=AR=D=P

The diagram above shows the price and output determination of a competitive firm and a monopoly. Diagram A shows the downward sloping demand curve of the monopolist with the price higher than the MC. The second diagram, however, shows the infinitely elastic demand curve of perfect competitive firms with the price equal to the MC. From the diagram above it is clear that the price of the monopolist is greater than the MC while the price of a competitive firm is equal to MC. Therefore, at every point in time, the monopoly will always set a price that is higher than a competitive firm.

3 Businesses are mechanisms designed to organize people and resources. They have social, economic and environmental effects on people and communities. They have contributed to the socio-economic and political development of every nation. Even though businesses are economic agents, their roles are defined differently in different countries and at different periods (Salls, 2004). Despite the economic goals of providing goods and services and making profits that businesses set out to achieve, they also have a range of effects and play a number of roles in the society. Businesses produce and deliver goods and services in a manner that creates value for members of the society thereby immensely impacting human development and societal wellbeing (Margolis, Walsh & Weber, 2003a). According to Nelsen (2006), businesses, small and large have vital roles to play in the socio-economic development process. She argued that while focusing on its core business operations, businesses contribute to social development through social investment and strategic philanthropy activities and its engagement in public policy dialogue, advocacy and institution building. According to World Bank (2005) and UN Commission on the Private Sector and Development (2005), under the right conditions, business

offers the potential to increase innovation, spur wealth creation, raise productivity, meet basic needs, enhance living standards and improve the quality of life of millions of people globally. But for business to serve as a tool for social betterment, implementation of responsible business practices and standards in areas such as ethics, labor and human rights, environment must be conscientiously pursued. This is to enable it manage risks, minimize negative externalities, and protect existing market and social values. By producing goods or providing services, businesses improve the socio-economic conditions in the societies they operate. They create employment opportunities directly and indirectly for residents of their host communities thereby improving their socio-economic status and standard of living. Businesses contribute to society by employing a workforce to provide goods and services which are hitherto not available and, in so doing, fulfilling peoples needs and creating wealth. The arm of business that examines its role in social development is often referred to as corporate social responsibility. Corporate social responsibility refers to the obligations of businesses to the society. It deals with the role of businesses in the society beside its primary role of providing goods and services. Socially responsible businesses significantly impact itself and its immediate society (Margolis, Walsh & Weber, 2003b). Employing local people can have social benefits on the employee and the community. Many businesses also engage in community services by supporting charity, advancing scholarship to local students, providing social amenities, educating their neighbors, etc. According to Martin (2009), businesses enhance social betterment especially in poor regions by providing public goods and services such as education and health on a large scale. Without businesses, goods and services which have improve standard of living and social

welfare today wouldnt have been provided. Likewise, employment generation which is one of the facilitator of social development be limited in the absence of businesses. Business has fostered good interpersonal relationship among people of different races and background. By engaging in business relations, people from different cultures, countries and backgrounds have had the opportunity of coming together thereby enhancing peace and cooperation. Similarly, business has facilitated international cooperation and has been a major driver of globalization. As a result of engaging in international business, the economic status of various countries has improved with direct and indirect effects on the social life of their people. Nelsen (1996) argued that apart from the desire for economic gains, business contributes to social development by creating jobs, improving the livelihood of the poor, helping to tackle environmental challenges, delivering goods and services to low-income individuals and communities and helping to build administrative capability and public capacity. He added that businesses have partnered governments and civil society organizations to jointly support efforts aimed at improving the living conditions of citizens. World Business Council for Sustainable Development (2005) opined that while there is wide variation in the specific contributions of different businesses to social development, generally, they have improved socio-economic conditions of global populace by spreading access to economic opportunity, increasing access to health and safety, pro-poor financial services, clean and affordable water and energy and information technology. The World Development Report of 2005 emphasizes the role of business in social betterment through innovation, technological advancement, employment and opportunities creation, provision of goods and services, provision of fund for social amenities through tax revenue. In all these ways, business serves as an important tool for socio-economic empowerment.

In conclusion, businesses primarily seek to maximize profit but in the process helps to enhance the socio-economic wellbeing of people through provision of goods and services, creation of jobs and opportunities, execution of corporate social responsibilities and other avenues.

REFERENCES Margolis, J., Walsh, J. P., & Weber, K. (2003a). Social issues and management: Our lost cause found. Journal of Management, December. Margolis, J., Walsh, J. P., & Weber, K. (2003b). Misery love companies: Rethinking social initiatives by business. Administrative Science Quarterly, 48, 268-305. Martin, M. (2009). Social development and commodity business: An entrepreneurial approach (French). Bulletin de la Societe dEtudes Economiques et Sociales, 67(3), 121-134, September. Nelsen, J. (1996). Business as partners in development: Building wealth for countries, companies and communities. World Bank, UNDP and International Business Leaders Forum. Nelson, J. (2006). Leveraging the development impact of business in the fight against poverty. Corporate Social Responsibility Initiative Working Paper No. 22, John F. Kennedy School of Government, Harvard University, April. Salls, M. (2004). Why we dont study corporate responsibility. Retrieved online from www.hbswk.hbs.edu/item/4129.html on March 18, 2012. United Nation Commission on the Private Sector and Development (2005). Unleashing entrepreneurship: Making business work for the poor. World Bank (2005). World Development Report. Geneva: World Bank. World Business Council for Sustainable Development (2005). Business for development:

Business solutions in support of Millennium Development Goals. World Business Council for Sustainable Development.