What are the fundamental factors that affect whether a business should invest?

Investment is your income minus (your savings +
consumption). So, the more you Invest in something, the less you can save your income
for your future uses, and the less you can use your income right
now.

So, if your business is going to productivity if you
invest right now, then you should do so, after considering the opportunity costs of your
consumption and future investments.

In order to decide
whether your current investment will increase the productivity of your firm or or not,
you have to look at your marginal revenue-which is the additional revenue that you get
when you produce an additional product. If your marginal revenue is on the rise, then
you should definitely invest right now, because it means your business currently has
potential, meaning it can expand further. However, if your marginal revenue is negative,
you should put your investments in other uses, like consumption and
saving.