Which of the following is financial decision?

A. Investment decision
B. Financing decision
C. Dividend decision
D. Capital budgeting decision
E. Profitability decision

Choose the correct answer from the options given below.

A, B and C only

The correct answer is option 2- A, B and C only.

Investment decision, Financing decision, Dividend decision are financial decision.

Financial management is concerned with the solution of three major issues relating to the financial operations of a firm corresponding to the three questions of investment, financing and dividend decision. In a financial context, it means the selection of best financing alternative or best investment alternative. The finance function, therefore, is concerned with three broad decisions.

• Investment decision relates to how the firm’s funds are invested in different assets. Investment decision can be long-term or short-term.

• 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.

• The third important decision that every financial manager has to take relates to the distribution of dividend. Dividend is that portion of profit which is distributed to shareholders. The decision involved here is how much of the profit earned by company (after paying tax) is to be distributed to the shareholders and how much of it should be retained in the business.