ABSTRACT
The need for rapid economic development has ranged Yugoslavia among countries with the highest investment rate in the world. This chapter deals with the following problems: investment efficiency, capital intensity, the ratio of production to investment in working capital, certain methods of investment selection regarding various economic activities, and the results of empirical checking. Efficiency of investment is considered solely on the basis of the capital coefficient derived for industry as a whole. Capital intensity is expressed in terms of the value of fixed assets at replacement cost per employed and labor productivity is expressed as income per employed. Working capital accounts for a large portion of total capital invested in production. In addition, it is involved in a very intricate pattern of relationships with other economic phenomena. The complexity of economic development manifests itself with particular force in the selection of investments, either as regards various economic activities or within the framework of a homogeneous economic activity.
