Assertion: Investment decision can be long-term or short-term.
Reasoning: A long-term investment decision is also called Capital Budgeting decision. Short-term investment decisions are called working capital decisions.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

The correct answer is Option 2: Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

Assertion: Investment decision can be long-term or short-term. This is correct. Investment decisions can indeed be categorized as long-term or short-term. Long-term investment decisions involve allocating resources for projects or assets that will yield returns over an extended period, while short-term investment decisions involve managing working capital and other assets for shorter durations.

Reasoning: A long-term investment decision is also called Capital Budgeting decision. Short-term investment decisions are called working capital decisions. This is also correct.

R does not Explain A: While Reasoning (R) accurately identifies that long-term investment decisions are often referred to as capital budgeting decisions and short-term investment decisions are related to working capital management, it does not directly explain why investment decisions can vary in duration.

"Financial management, among others, involves decision about the proportion of long-term and short term funds. A long-term investment decision is also called a Capital Budgeting decision. Short-term investment decisions (also called working capital decisions) are concerned with the decisions about the levels of cash, inventory and receivables. These decisions affect the day-to-day working of a business."