Target Exam

CUET

Subject

Business Studies

Chapter

Financial Management

Question:

Read the following passage and answer the question.

MAM is renowned multiplex operator in India. It own around 500 screens in 100 properties at 90 locations in the country. Considering the fact that there is more growing trend among the people to spend more of their disposable income on entertainment, company planned to add more screen at existing locations and start at new locations also. Further, they plan to add food chain also at their locations. The company planned to float equity shares in market to raise the desired capital. The issue was fully subscribed and paid. Over the year, the sale and the profit of the company have increased tremendously and it has been declaring higher dividend and the market price of its share has increased manifolds.

Which financial decision is highlighted in the given lines?

"Considering the fact that there is more growing trend among the people to spend more of there disposable income on entertainment, company planned to add more screen at existing locations and start at new locations also"?

Options:

Dividend decision

Investment decision

Financing decision

Working capital decision

Correct Answer:

Investment decision

Explanation:

The correct answer is option 2- Investment decision.

The financial decision highlighted in the given lines is Investment decision.

The passage describes MAM's plan to expand its operations by adding more screens at existing locations and starting new locations, as well as adding food chains. This expansion involves allocating resources to growth opportunities, which is characteristic of an investment decision.