Several factors can motivate a company to reduce its investment levels:
Economic Uncertainty: During periods of economic instability, companies may scale back investments to conserve financial resources. Declining Sales: A drop in sales and revenue can lead to reduced funds available for reinvestment. Cost-Cutting Measures: Firms may adopt a more conservative approach to spending to improve profitability and maintain a healthy balance sheet. Strategic Shifts: Changes in the company's long-term strategy may result in the reallocation of resources away from certain areas.