Investment as the fundamental decisions in business administration
One of the fundamental decisions in business administration is the investment decision. Assets are utilized to generate streams of income that are coupled with specific costs or outflows.
The cost of capital is the cost of obtaining funds for, or, conversely, the required return necessary to meet its cost of financing a capital budgeting project. Said another way, it is "the minimum return that a company should make on its own investments, to earn the cash flow out of which investors can be paid their return."
Source: http://en.wikipedia.org/wiki/Cost_of_capital
In other words, you can tell that the investment is good if the money you spend will have 100% return or more according to your targeted period.
