Cash flow position of a concern affects the following concepts of financial management.

A. Capital Budgeting Decision

B. Capital Structure

C. Fixed Capital Requirement

D. Financing Decision

E. Dividend Decision

Choose the correct answer from the options given below :

A, B, D and E only

The correct answer is option (3)- A, B, D and E only.

A. Capital Budgeting Decision- Cash flows of the project: When a company takes an investment decision involving huge amount it expects to generate some cash flows over a period. These cash flows are in the form of a series of cash receipts and payments over the life of an investment. The amount of these cash flows should be carefully analysed before considering a capital budgeting decision.

B. Capital Structure- Cash Flow Position of the Company: A stronger cash flow position may make debt financing more viable than funding through equity.

D. Financing Decision- Cash Flow Position: Size of projected cash flows must be considered before borrowing. Cash flows must not only cover fixed cash payment obligations but there must be sufficient buffer also.

E. Dividend Decision- Cash Flow Position: The payment of dividend involves an outflow of cash. A company may be earning profit but may be short on cash. Availability of enough cash in the company is necessary for declaration of dividend.