أثرالتضخم علي قرارات الاستثمارات طويلة الأجل

Abstract

Abstract This study aims to examine the effect of inflation on long —run investment decision and to find out the required solutions. The study assumes three hypotheses. Firstly, the application of historical cost on the financial aspects of firms under inflation circumstances weakens the characteristics of accounting infonnation secondly, the use of historical cost as measurement of firm earnings capabilities would depreciate the capital, and thirdly the use of information based on historical cost under inflation circa stances makes the decisions irrational. All hypotheses have been approved .That is repayment period method is unrealistic for investment projects evaluation’ because it ignores the time value of money which deprecates the capital of firms when profits are distributed and that the items in the budget and revenues are unrealistic and irrelevant for rational economic decisions. The dependence on historical cost for financial procedures under inflation circumstance is ineffective. That is all decisions based on unrealistic data actually lead to fault results concerning the financial positions the firms Researcher