Final answer:
Long-term investment decisions in finance are handled within the area of Capital Budgeting or Corporate Finance, which includes the strategy and management of significant, long-lasting investments. Intertemporal decision-making is a key economic principle that guides these investment choices, balancing the consumption of goods now versus in the future.
Step-by-step explanation:
The area of finance that deals with long-term investment decisions is known as Capital Budgeting or Corporate Finance. This field focuses on strategies for firms to manage their long-term investments, which could include purchasing machinery, constructing new plants, or initiating research and development projects. To finance these investments, firms can access financial capital through various means such as issuing stocks, bonds, loans, or using retained earnings.
Decision-making in this area is often guided by intertemporal decision-making, which is an economic principle that addresses how individuals or firms decide on the allocation of resources across different periods. In essence, participants in financial markets weigh the trade-offs between consuming goods now or in the future. Investment decisions are thus made not only based on immediate needs but also on potential long-term benefits.