Bad investment

Investments are made by organizations to ensure the growth or maintenance of the organization in economic terms. In economic practice, a bad investment is an investment that does not achieve this goal and instead has caused more expenses than income.

For example, the following are used as assessment criteria for insufficient target achievement:

• one did not reach break-even point ( point breakeven )
• a negative return on investment (the invested capital pays negative interest, i.e. it is used up)
• a negative net present value .

Bad investments are primarily characterized by the fact that the capital employed cannot be completely withdrawn from the investment object (e.g. through sale).

Bad investments are also incomplete investments, the part of which has already been invested is useless or causes maintenance costs. Examples are motorways that have not been further developed .

See also: disinvestment

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Wiktionary: Bad investment  - explanations of meanings, word origins, synonyms, translations