Final answer:
The statement is true; investigation expenses are payments made to assess the feasibility of starting or expanding a business. These expenses are closely linked to the initial research and development phase before large investments are made.
Step-by-step explanation:
Investigation expenses are indeed expenses paid or incurred to determine the feasibility of entering a new business or expanding an existing business. This is true. When individuals start businesses, their goal is to make profits. They invest money, time, effort, and other resources with the hope of generating a return. However, not all endeavors are successful. Businesses must often conduct research and develop strategies before making substantial investments such as purchasing new equipment or constructing new facilities, especially during times of economic expansion when consumer demand is high and potential for profits increases. Establishing a brand or researching for feasibility requires investment, and these preliminary expenses, like fixed costs such as rent for premises or cost for equipment, are essential to business planning and are not dependent on the level of production.