Which of the following is correct?

Return on investment shows profitability of an investment

The correct answer is option 3- Return on investment shows profitability of an investment.

• The primary aim of financial management is to maximise (not arrange) shareholders’ wealth, which is referred to as the wealth-maximisation concept.

• Financing Decision is about the quantum of finance to be raised from various long-term sources. Short-term sources are studied under the ‘working capital management’. It involves identification of various available sources.

• ROI tries to directly measure the amount of return on a particular investment, relative to the investment's cost.

Thus, Option 3 is correct.